Fundamental Analysis

• With the US stock market closed, there have been no significant movements.
• The EU has initiated excessive deficit procedures against seven countries, including France and Italy, causing friction with the EU.
• If the far-right or left-wing factions win in France, there is concern that the fiscal deficit may expand.

USDJPY technical analysis

Analyzing the daily USDJPY chart, we see a modest but continuous rise. The high of 158.25 JPY is approaching, indicating a gradual yen depreciation. The 52-day moving average acts as a support line, aiming for the 158.25 JPY high.

If the 158.25 JPY high is breached, there is no resistance line up to 160 JPY. Although the Bank of Japan has decided to reduce its large-scale government bond purchases and commented that an additional rate hike in July is quite possible, it hasn’t led to yen appreciation.

Rather, yen depreciation continues, and the impact of currency intervention is waning. Reaching the 160 JPY level might just be a matter of time.

Day trading strategy (1 hour)

Analyzing the hourly USDJPY chart, we can see that the lower bound is gradually solidifying, and the lows are rising. The focus is whether it will break through 158.25 JPY. Today, the UK and Swiss policy rate announcements are scheduled, and European-related currency pairs are likely to be actively traded.

Also, depending on the results of the US unemployment insurance claims, USDJPY could move significantly. If the number of claims is high, employment conditions will be seen as easing, increasing rate cut expectations. If the number of claims is low, rate cut expectations will diminish.

The day trading policy is to buy on dips. We aim to buy in the upper 157 JPY range. Buy at 157.85 JPY, take profit at 158.25 JPY, and set a stop at 157.50 JPY.

Support/Resistance lines

The following support and resistance lines should be considered:

158.25 JPY: Recent high threshold

Market Sentiment

USDJPY: Sell: 63%, Buy: 37%

Featured Currency Pair of the Week (USDCAD)

US Dollar/Canadian Dollar continues to decline. Despite significant upper shadows, it ultimately falls. Due to the rebound in crude oil prices, the Canadian dollar is in a favorable buying environment. With the US market closed yesterday, there were no significant movements. Today, US crude oil inventory levels will be announced, potentially moving the crude oil market. USDCAD should be watched closely.

Today’s important economic indicators

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