Fundamental Analysis

• U.S. CPI Nearly Matches Market Expectations, Indicates Mild Inflation Deceleration
• Emergency Rate Cut Denied, Stock Indices Rise
• USDJPY Drops to 146 JPY, Rebounds, Trades Around 147.25 JPY

USDJPY technical analysis

Analyzing the daily chart of USDJPY. After a sharp decline, USDJPY rose to the 147 JPY range, but the 148 JPY level remains a tough resistance. It was expected that the U.S. CPI would set a direction, but the movement remained limited. The results suggest a slowdown in U.S. inflation, implying rate cuts are likely, but gradual rate hikes are still anticipated.

USDJPY is forming a range between 146 JPY and 147.80 JPY. If the range is broken to the upside, there is potential for an increase to around 148.50 JPY, corresponding to the 38.2% Fibonacci retracement level.

Day trading strategy (1 hour)

Analyzing the 1-hour chart of USDJPY, it is evident that a range is forming. The 23.6% Fibonacci retracement level on the daily chart acts as support and is at the lower bound of the range. The upside near 148.60 JPY remains very heavy, preventing a breakout of the range.

Today, U.S. Initial Jobless Claims will be released, providing insights into the employment situation.

The day trading strategy is to enter a sell position at 147.80 JPY and a buy position at 146.50 JPY within the range strategy. Place a stop at approximately 20 pips in case of reversal.

Support/Resistance lines

The following support and resistance lines should be considered:

147.80 JPY – Upper bound of the range

Market Sentiment

USDJPY Sell: 49% Buy: 51%

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.