USDJPY Falls Back, Influenced by Month-End Rebalancing and Downgrade of US GDP【May 31, 2024】

May 31, 2024

Markets Analysis

Fundamental Analysis

  • US GDP Downgraded, USD Sold Off
  • US Long-Term Interest Rates and Japanese Long-Term Interest Rates Fall, Putting Selling Pressure on USDJPY
  • USDJPY Rebounds at 240 Moving Average Line, Be Cautious of Month-End Rebalancing Movements

USDJPY technical analysis

Analyzing the daily chart of USDJPY, it hit the resistance line at 157.70 JPY, failed to break above, and subsequently fell back, trading around the 156 JPY level. The failure to break the recent high suggests a possible downward phase ahead. Attention is focused on the Bank of Japan’s monetary policy meeting to be held over two days from June 13.

Yesterday, both Japanese and US long-term interest rates fell, and the USD selling intensified following the downgrade of US GDP. This, along with the impact of month-end rebalancing, has strengthened the downward movement of USDJPY.

Using Williams %R analysis, the Williams %R period 24 stands at -15, indicating a level slightly below the peak. Attention is also focused on whether it will break the central line of the Bollinger Bands.


Day trading strategy (1 hour)

Analyzing the 1-hour chart of USDJPY, it rebounded at the 240 moving average line, which indicates the two-week moving average. Williams %R (24) stands at -57, indicating a slight rebound from the lowest point in the past 24 hours but still showing a downward trend.

It is necessary to pay attention to whether the 240 moving average line acts as a support line and whether it recovers again. Following the downgrade of US GDP, the US stock index continues to decline, casting some shadows over the market.

As for the day trading strategy, we are considering buying on dips with an entry point at 156.85 JPY, a settlement point at 157.70 JPY, and a stop point at 156.50 JPY.

Support/Resistance lines

The following support and resistance lines should be considered in the future:

157.70 JPY – Weekly resistance line


Market Sentiment

USDJPY – Sell: 64%, Buy: 36%

Featured Currency Pair of the Week (GBPCAD)

The British Pound to Canadian Dollar is continuing its sideways movement. The strength of the currencies is balanced, and it cannot break out of the range. Today, Canada’s GDP will be announced. As it is a major economic indicator for the country, there may be some movement in the British Pound to Canadian Dollar. If Canada’s GDP results are weak, the British Pound may gain momentum. We should pay attention to Canada’s GDP today.

Today’s important economic indicators

Economic indicators and eventsJapan time
Japan Unemployment Rate8:30
US Personal Consumption Expenditures Price Index21:30
EU Consumer Price Index18:00
Canada GDP21:30

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

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