Markets Analysis

Fundamental Analysis

• Today, the world’s major markets are closed for the Easter holiday.
• Gold has updated its all-time high to 2236USD, driven by expectations of a US interest rate cut and a rise in safe-haven assets.
• The Prime Minister has also made statements to curb the weakening of the JPY, increasing fears of foreign exchange intervention.

USDJPY Technical Analysis

Let’s analyze the daily chart of USDJPY using Bollinger Bands, moving averages, ADX, and ATR.

The ADX stands at 48, indicating a very strong trend is occurring. However, both +DI and -DI are declining, suggesting that while the uptrend continues, there has recently been a stalemate.

Volatility is also indicated to be decreasing, with an average daily volatility of about 80Pips. After volatility decreases, there tends to be a breakout trend, as previously seen when it dropped from the 150JPY range to the 130JPY range after reaching similar levels.

The Bollinger Bands remain apart, suggesting that a breakout might be less likely until they narrow further. The short-term MA crossing above the long-term MA indicates an uptrend.

Day Trading Strategy (1-Hour Chart)

Analyzing the 1-hour USDJPY chart, there is little variation, with the short-term and long-term MAs almost overlapping, leading to a stalemate. There have been reports of meetings between the Bank of Japan and the government, and statements by officials curbing the weakening of the JPY, preventing it from reaching the 152JPY level. There are extremely few traders placing buy orders.

Market expectation is that if it surpasses the 152JPY level, foreign exchange intervention could occur, and it is being closely monitored. Given the end of the fiscal year, trading is not being aggressively pursued. Volatility is expected to increase after April.

The fundamental factors have not changed, so a continuation of the weakening of the JPY and strengthening of the USD is expected, but buying entries at the 151JPY level should be avoided. With the world’s major markets almost entirely closed for the Easter holiday, it is advised to wait and see, preparing for movements after April.

Support and Resistance Lines

The following are the support and resistance lines to consider:

152JPY – Round number

Market Sentiment

USDJPY Sell: 74% Buy: 26%

Today’s important economic indicators

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.