Fundamental Analysis

• BOE committee members comment in favor of maintaining high-interest rate policy.
• Tonight, Fed Chair Powell will testify before the Senate; focus on interest rate policy.
• PBOC refrains from purchasing gold, creating selling pressure on gold.

USDJPY technical analysis

Analyzing the daily chart of USDJPY, the pair failed to reach the 162 JPY level and retreated. It remains stagnant in the high 160 JPY range. The moving averages form a perfect order, indicating a strong upward trend. A channel can be drawn, and as long as it stays within this channel, a shift to a downward trend is unlikely.

Today, Fed Chair Powell is scheduled to testify before Congress. Considering the worsening employment data and various other indicators, there is a possibility that he might mention a rate cut. If the stock market rises, the decline in USDJPY might be limited, but if stocks fall, there could be a sharp increase in dollar selling, potentially causing a steep drop in USDJPY. The lower boundary of the channel is in the high 158 JPY range.

It is essential to fully consider the risk of increased volatility and be very cautious with position management.

Day trading strategy (1 hour)

Analyzing the 1-hour chart of USDJPY, a downward trend is evident. Currently, it is trading above the centerline of the Bollinger Bands. There is a high possibility that Powell might mention a rate cut, which is of significant interest to those concerned about the high-interest rate policy.

If he mentions a rate cut, it would naturally lead to dollar selling.

As a day trading policy, if the price reaches around 161.50 JPY, I would consider a test sell. If it falls below 160.28 JPY, I would anticipate a decline to around 158.88 JPY.

Support/Resistance lines

The following support and resistance lines should be considered going forward.

161.50 JPY – Trend Line

158.88 JPY – Monthly Support Line

Market Sentiment

USDJPY: Sell – 69%, Buy – 31%

Featured Currency Pair of the Week (AUDJPY)

Analyzing the daily chart of AUDJPY, it is trading around 108.40 JPY with no signs of decline. The RSI is around 73.8, showing no signs of a downward signal. It maintains a strong upward trend. The resistance level for AUDJPY is expected to be 109 JPY.

Today, with Powell’s testimony, there is a potential for significant market sensitivity to his remarks. The outlook on US interest rate policy will be scrutinized. Whether the dollar is sold or bought, AUDJPY could experience significant movement. Caution is advised.

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.