Fundamental Analysis

• U.S. jobless claims increase, halting USD buying
• USDJPY rebounds; today’s movements could set the tone for next week
• Ichimoku cloud provides support, will it return within the channel?

USDJPY technical analysis

USDJPY dropped to around 155.36JPY but rebounded. The rise in expectations for a U.S. rate cut, Trump’s remarks, demands for rate hikes by ministers, and interventions by the Bank of Japan caused a sharp drop from the 162JPY level to the 155JPY level.

However, Trump is not yet president, and it is seen as difficult for the BOJ to implement rate hikes while simultaneously reducing bond purchases. Also, currency intervention is considered a last resort, and Finance Minister Kanda will retire at the end of July. It is unlikely that the new finance minister will immediately intervene in the currency market.

Therefore, if the factors for JPY appreciation are absorbed, JPY depreciation might occur again. The MACD shows a bearish signal, and the Ichimoku cloud is acting as a support zone. Both scenarios are possible at this point.

Day trading strategy (1 hour)

Analyzing the 1-hour USDJPY chart, it appears to have found a bottom around the 155JPY level. It resembles an inverse head and shoulders pattern. If it breaks the neckline, it might aim for around 158.30JPY.

The day trading policy is to buy. Enter around the low 157JPY range and aim to exit just before the 158JPY range. If it falls below 156.85JPY, consider exiting.

Support/Resistance lines

Future support and resistance lines to consider are as follows:

157.70JPY – Previous high

Market Sentiment

USDJPY Sell: 51% Buy: 49%

Featured Currency Pair of the Week (EURJPY)

EURJPY has rebounded and recovered to 171JPY. It bounced off the 52-day moving average, but it’s uncertain if it will return to a JPY depreciation trend. From a medium- to long-term perspective, the 52-day moving average has reacted at least four times in the past. Observing past movements, after hitting the 52-day moving average, bullish candles appeared consecutively the next day, leading to a new recent high.

Considering Trump’s remarks, demands for rate hikes by Minister Kono, and the BOJ meeting at the end of the month, there are JPY appreciation factors, and the market environment is different from before. Be mindful of Trump’s influential statements.

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.