Fundamental Analysis

• With U.S. tech company earnings reports concentrated this week, the market adopts a wait-and-see attitude.
• USDJPY faces resistance at 157 yen level, yen strengthening trend intensifies
• Expectations rise for BOJ’s reduction in government bond purchases and interest rate hikes.

EURUSD technical analysis

Analyzing the daily chart of EURUSD, it forms an engulfing pattern at the high range, currently fluctuating around the 23.6% Fibonacci retracement level. From a broader perspective, it moves within a triangle, with the trend width gradually narrowing. A breakout is expected at some stage. Attention should be given to this week’s corporate earnings reports.

From a USD perspective, the focus is on the BOJ meeting. Overseas investors expect simultaneous reduction in government bond purchases and interest rate hikes. However, considering the BOJ’s past responses, the possibility of simultaneous implementation seems extremely low. Therefore, USD buying may strengthen.

Day trading strategy (1 hour)

Analyzing the 1-hour chart of EURUSD, the area around 1.088 USD acts as a significant support zone. This serves as the neckline, and a breakout could lead to a significant decline. However, there tends to be a rebound after breaking the neckline. It is better to sell after confirming the neckline has turned into a resistance zone.

A sell entry is desired at the stage where 1.088 USD is broken and confirmed as a resistance zone. Consider closing the position at 1.0845 USD.

Support/Resistance lines

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

1.0880 USD: Monthly support line

Market Sentiment

EURUSD Sell: 78%, Buy: 22%

Featured Currency Pair of the Week (USDCHF)

USDCHF shows minimal price movement. From a broader perspective, it can be seen as a pullback, but whether USD buying will strengthen depends on corporate earnings reports. Additionally, the BOJ policy meeting is scheduled for the end of the month. The moving average forms a dead cross, indicating a slightly bearish trend. Focus on whether the recent low will be broken.

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.