Markets Analysis

USDJPY Continues to Rise, Market Focuses on US CPI【May 15, 2024】

May 15, 2024

Markets Analysis

Fundamental Analysis

  • The Producer Price Index (PPI), a precursor to the CPI, shows mixed strengths
  • Chairman Powell of the US Federal Reserve denies further rate hikes at this stage
  • Market fluctuations are expected before and after today’s US CPI announcement.

USDJPY technical analysis

The daily chart analysis of USDJPY shows a continued upward trend over the past week, with strong buying pressure. With the limited effect of currency interventions ending, a new high is imminent. Depending on today’s US CPI results, USDJPY could move either upwards or downwards.

Chairman Powell of the Federal Reserve has denied further rate hikes but intends to continue a high-interest rate policy. If the US CPI is strong, inflation concerns may increase, raising speculation of rate cuts. Conversely, a weak US CPI may decrease speculation of rate cuts, affecting USDJPY movements.

Drawing Fibonacci arcs suggests that around 157.5 JPY could be a pivotal price. Also, the 24-day moving average has been a support line for USDJPY, making this line a crucial support.


Day trading strategy (1 hour)

The analysis of the 1-hour chart of USDJPY shows the 24 moving average acting as a support line, with a rebound at 156.24 JPY. The 157.00 JPY area, corresponding to the Fibonacci 61.8%, is likely to be the next resistance line.

With the US CPI announcement impending, a wait-and-see market is expected. While buying on dips could be effective for day trading, positions are undesirable before the CPI announcement. Post-CPI results will dictate the subsequent moves.

Support/Resistance lines

The following are the support and resistance lines to consider:

157.00 JPY – Fibonacci 61.8%


Market Sentiment

USDJPY: 83% Sell, 17% Buy

Featured Currency Pair of the Week (AUDNZD)

The daily chart analysis of AUDNZD shows a retracement high being formed, trending downward. Whether it breaks below the recent low of 1.095 NZD will be the focus going forward. A clear break below 1.095 NZD would trigger a downward trend according to Dow Theory.

Today, besides the US CPI announcement, there are numerous comments from FOMC members scheduled. Although not directly impacting this currency pair, volatility could slightly increase.

Today’s important economic indicators

Economic indicators and eventsJapan time
EU Zone GDP18:00
US Consumer Price Index21:30
US Retail Sales21:30
New York Fed Manufacturing Index21:30
Crude Oil Inventory23:30
FOMC Member Speech1:00 (next day)
FOMC Member Speech4:20 (next day)

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

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