USDJPY Faces Resistance, Japan’s Long-term Interest Rate Remains at 1.0%【May 28, 2024】

May 28, 2024

Markets Analysis

Fundamental Analysis

  • The US and UK stock markets were closed yesterday, leading to little movement in the markets.
  • Japan’s long-term interest rate closed above 1.0%, maintaining an upward trend.
  • USDJPY faces resistance at higher levels.

USDJPY technical analysis

Analyzing the daily USDJPY chart, we see resistance at higher levels, with a pullback just below the 157 JPY mark. Yesterday, with the US and UK markets on holiday, there was minimal movement. It is expected that the market will form a narrow range for a while. The recent high is at 156.75 JPY, and if it breaks below 156.75 JPY, a drop to 156.25 JPY is possible.

On the other hand, cross yen pairs, especially GBPJPY, have reached the 200 JPY level. The strong buying of GBP is drawing market attention. If the upward momentum slows and it falls below 156.25 JPY, caution for downside risk is needed.


Day trading strategy (1 hour)

Analyzing the 1-hour USDJPY chart, it forms a narrow range between 156.60 JPY and 156.90 JPY. With no significant economic indicators expected today and the end of the month approaching, rebalancing movements are likely. An overwhelmingly bullish USDJPY market is unlikely.

The ADX shows a slight increase in downward momentum. The rising long-term interest rates in Japan are also capping the upside of USDJPY.

The day trading strategy is to sell near 157 JPY and buy back in the early 156 JPY range. If it clearly exceeds 157.15 JPY, positions should be freed.

Support/Resistance lines

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

156.25 JPY – Major Support Line


Market Sentiment

USDJPY Sell: 72% Buy: 28%

Featured Currency Pair of the Week (GBPCAD)

GBPCAD also remains in a quiet market. +DI is below 30, indicating a slight easing of upward momentum. With the rebound in crude oil prices, CAD is being bought back. With the UK on holiday, GBPCAD is slightly retracing.

If trading volume increases in the US and UK markets today, there is a possibility of a GBP buying market again. We should wait for a buying opportunity on dips. Important Economic Indicators of the Day

Today’s important economic indicators

Economic indicators and eventsJapan time
BOJ Core CPI14:00
Germany Consumer Price Index21:00
US Consumer Confidence Index23:00

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

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