USDJPY Continues to Rise, FOMC Minutes Show Hawkish Content【May 23, 2024】

May 23, 2024

Markets Analysis

Fundamental Analysis

  • FOMC minutes show hawkish content with many opinions advocating for continued monetary tightening.
  • NVIDIA’s revenue forecast surpasses market expectations, causing NASDAQ to rise.
  • UK CPI does not decelerate as expected, reducing rate cut prospects and causing GBPUSD to rise.

USDJPY technical analysis

Analyzing the USDJPY daily chart. After the release of the FOMC minutes, USDJPY rose and hit a high of 156.80 JPY. It has surpassed recent highs, indicating the start of an uptrend. The next target is expected to be around 157.22 JPY, corresponding to 100% Fibonacci expansion.

Recent trends show that the 52-day moving average is significant for USDJPY. There have been two recent reactions to it. The 52-day moving average is moving around 154.18 JPY, suggesting that even if it falls, it is likely to stop around the 154 JPY level. Analyzing GMMA, the wide gap between long-term GMMA and short-term GMMA also suggests a strong uptrend.

The FOMC has opinions supporting monetary tightening, which the market perceived as hawkish. The decline in rate cut expectations led to a rise in USDJPY.


Day trading strategy (1 hour)

Analyzing the USDJPY 1-hour chart. USDJPY continues to rise, updating recent highs. Considering the fundamentals, with US rate cut expectations receding, USD is becoming more favorable. It seems inevitable that it will reach the 157 JPY range.

With the G7 meeting scheduled for this week and two previous currency interventions already implemented, additional currency interventions seem unlikely.

The day trading strategy is to buy. It seems possible to enter new buys up to 157.22 JPY. The target for settlement is around 157.20 JPY. If it breaks below 156.65 JPY, stop for a while. If it falls to around 156.40 JPY, consider buying the dip.

Support/Resistance lines

The support and resistance lines to consider in the future are as follows:

157.22 JPY – Fibonacci expansion 100%


Market Sentiment

USDJPY Sell: 69%, Buy: 31%

Featured Currency Pair of the Week (CHFJPY)

The Swiss Franc Yen is a difficult market, with the focus on whether it will break below the recent low of 170.95 JPY. Recently, engulfing and harami patterns have appeared, signaling a decline. Although it fell below 171 JPY yesterday, it rebounded.

With USDJPY rising, JPY is more likely to be sold, making CHFJPY less likely to fall. Maintain a wait-and-see attitude.

Today’s important economic indicators

Economic indicators and eventsJapan time
US Unemployment Claims21:30
US Services PMI22:45

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

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