Fundamental Analysis

• Market participants are taking a cautious stance ahead of the Bank of Japan (BoJ) meeting, FOMC, and employment statistics.
• USDJPY has rebounded but lacks a clear direction, possibly indicating position adjustments.

USDJPY technical analysis

Analyzing the daily chart of USDJPY, we see a significant lower shadow indicating a rebound. The recent low was at 151.94 JPY, and the pair is now trading around 154 JPY. The Stochastic oscillator is rebounding from the 20 level. However, this movement appears to be more of a position adjustment rather than a trend reversal. The upward momentum is weak, and the chart is shaping up to target previous highs.

The key point is whether USDJPY can rise above the conversion line on the Ichimoku Kinko Hyo. The triple big events of the BoJ meeting, US ADP employment data, and the FOMC are scheduled for Wednesday.

Day trading strategy (1 hour)

Analyzing the 1-hour chart of USDJPY, the pair rose from the 151 JPY level to the 153 JPY level and then took a pause. There is speculation about whether the BoJ will raise rates or not, with overseas traders having sold off USDJPY in anticipation of a rate hike. However, with weak consumer spending and skepticism about simultaneously reducing large-scale government bond purchases and raising rates, there is uncertainty.

The BoJ has hinted at proceeding cautiously with its policy, showing an extreme aversion to surprising the market.

Day trading is challenging, but we recommend a buy-on-dip strategy. Aim for 154.70 JPY, buying around 153.90 JPY. Set the stop at 153.75 JPY on a 1-hour closing basis.

Support/Resistance lines

The following support and resistance levels should be considered going forward:

154.90 JPY – Conversion line on the daily chart

Market Sentiment

USDJPY: Short: 46%, Long: 54%

Featured Currency Pair of the Week (EURAUD)

Analyzing EURAUD, we see a sharp rise influenced by a sell-off in the Australian dollar. There is a high probability of a pullback as important events this week approach. Profit-taking is expected, so caution is advised around the conversion line on the daily chart, which is near 1.643 USD. Given the difficulty in movement until Wednesday, a gradual decline is possible.

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.