Fundamental Analysis

• The Nikkei Average recorded its largest drop, temporarily down 8,000 JPY.
• USDJPY fell to 140 JPY, indicating a possible selling climax.
• Market movements are factoring in the expectation of a US interest rate cut.

USDJPY technical analysis

Analyze the daily USDJPY chart. USDJPY fell to the 141 JPY level, and the RSI dropped to 21. Following positive US ISM Non-Manufacturing Index data, it recovered to 145 JPY. It is possible to consider that it rebounded at the -3σ line of the Bollinger Bands.

Although the ADX indicates a strengthening downward trend, there is a high possibility of a corrective rebound. In the presence of a strong trend, the 10-day moving average serves as a reference. Since the 10-day moving average is around 149 JPY, it is possible that it could quickly rebound to around 148 JPY.

It is a situation where you want to aim for a sell on the rebound.

Day trading strategy (1 hour)

Analyze the 1-hour USDJPY chart. The 52-period moving average is a reference on the 1-hour chart. After falling to the 141 JPY level, it has returned to 145 JPY. Typically, this represents a terrifying level of volatility. Looking at the ATR on the 1-hour chart, the 12-period (half-day) average volatility is 90 pips.

Risk management should be more stringent than usual.

While the yen’s appreciation trend remains unchanged, it’s best to avoid easy sell entries. Consider entering around 145.50 JPY where the 52-period moving average is trending, setting a stop at 146.80 JPY and closing at 143.60 JPY.

Support/Resistance lines

The support and resistance lines to consider moving forward are as follows:

141.70 JPY – Recent low

140.18 JPY – Previous low

Market Sentiment

USDJPY: Sell: 44% Buy: 56%

Featured Currency Pair of the Week (AUDNZD)

Analyze the Australian Dollar/New Zealand Dollar. Due to the impact of the global simultaneous stock market decline, volatility is greater than usual. However, since the Australian Dollar and New Zealand Dollar tend to move similarly, a strong trend is unlikely to develop in this currency pair.

Today, the Australian Dollar’s policy interest rate will be announced. If there is a surprise in the policy interest rate, the Australian Dollar may be temporarily sold off. AUDNZD has rebounded at the 200-day moving average.

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.