USDJPY Slightly Rises, Be Cautious of US CPI and FOMC Shock【June 12, 2024】

June 12, 2024

Markets Analysis

Fundamental Analysis

  • French Political Turmoil Leads to Selling of French Bonds and Buying of German Bonds
  • Focus on US CPI and Dot Plot (Interest Rate Forecast)
  • If the Expected Number of US Rate Cuts Falls Below Two, USD May Rise Sharply

USDJPY technical analysis

The target price for USDJPY is 157.70 JPY. Attention is on whether it can break above the recent high. During the day, a wait-and-see attitude is spreading, and price movements are likely to be limited. Focus on US CPI and the dot plot.

Especially regarding the dot plot, financial analysts’ forecasts are divided. While some analysts maintain the expected number of rate cuts at three, more than 40% of analysts predict the number of rate cuts to be less than two or none. Amidst a slightly sluggish economy, the number of US employees has increased more than expected, putting the Federal Reserve in a very difficult position.

If the expected number of US rate cuts remains at three, selling pressure on USDJPY will strengthen. Conversely, if the number of rate cuts decreases, a sharp rise is inevitable. Pay close attention to your positions.


Day trading strategy (1 hour)

Analyzing the 1-hour chart of USDJPY, there is a neckline around the mid-156 JPY range, so before the NY session, if it reaches the mid-156 JPY range, the buying policy should be adopted. During the London session, all positions should be closed and wait for the results announcement.

If the expected number of US rate cuts remains at three, selling may occur. A drop to around 155.70 JPY or a temporary plunge into the 153 JPY range is possible. If the expected number of US rate cuts is less than two, a sharp rise in USD is expected. The target upper price is around 159.55 JPY.

Regardless of the outcome, one should be prepared for a fluctuation of about 200-300 pips.

Since the dot plot results will be announced around 3 AM, it is recommended to be extremely cautious about holding positions after the NY session and to implement thorough risk management.

Support/Resistance lines

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

156.50 JPY – Neckline


Market Sentiment

USDJPY Sell: 65%, Buy: 35%

Featured Currency Pair of the Week (GBPNZD)

Analyzing the GBPNZD. Today, the UK GDP announcement is scheduled, as well as the US CPI, FOMC, and dot plot announcements, making it a busy day for events. Yesterday, it closed below the upward trendline, highlighting a downward trend, but today’s economic indicators will likely cause significant fluctuations. Cross-currency pairs are difficult to predict, so trading should be cautious today. We will consider whether to trade after today.

Today’s important economic indicators

Economic indicators and eventsJapan time
UK GDP15:00
German Consumer Price Index15:00
US Consumer Price Index (CPI)21:30
US Crude Oil Inventory23:30
FOMC Statement and Interest Rate Forecast3:00 AM
FOMC Press Conference3:30 AM

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

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