Fundamental Analysis

• The market is in a holding pattern ahead of tomorrow’s Bank of Japan (BOJ) meeting and the Federal Open Market Committee (FOMC), with USDJPY trading in the range of 153JPY to 154JPY.
• Crude oil continues to decline, raising concerns about demand and suggesting a potential global economic downturn.
• A U.S. interest rate cut in September is now fully priced in.

USDJPY technical analysis

USDJPY is currently trading around 153.95JPY, in a range-bound market. With the BOJ meeting and FOMC looming, there is a cautious approach among traders, with few willing to take on aggressive positions. This cautious sentiment is expected to persist, likely leading to limited price movements today.

Buying positions in JPY have also paused, with traders possibly waiting for policy rate decisions before making entries. Should an interest rate hike occur, the pair could potentially drop below 149JPY, with a target around 145JPY.

Day trading strategy (1 hour)

Analyzing the 1-hour chart for USDJPY, the pair was trading in the 153JPY range yesterday. Trading activity is subdued ahead of tomorrow’s policy rate announcements, with the pair moving within a very narrow range. Should the price clearly break below 153.30JPY, a move into the 152JPY range is possible.

153.20JPY is likely to serve as a short-term and near-term support level. Consider a contrarian buy at this level. Similarly, entering on a contrarian basis around 151JPY could be viable. Focus on short-term trading strategies today.

Support/Resistance lines

The following support and resistance levels should be considered:

151.95JPY – Recent Low

150.90JPY – Previous Support Line

Market Sentiment

USDJPY: 45% Short, 55% Long

Featured Currency Pair of the Week (EURAUD)

EURAUD is in a correction phase. It formed a spinning top at the high and then reversed, with a bearish market continuing yesterday. A descending trendline can be drawn, and it will be crucial to see if this line acts as support. Currently, the pair is trading around 1.652USD, with a significant monthly resistance line at 1.6589USD. Tomorrow’s FOMC could cause substantial fluctuations. The decline in crude oil also makes AUD susceptible to selling pressure.

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.