Fundamental Analysis

• The FOMC minutes reveal that Chairman Powell is leading a significant rate cut.
• Some members support a more gradual cut. Today’s focus is on the US CPI.

USDJPY technical analysis

We analyze the daily chart of USDJPY. The pair is currently encountering the 90-day moving average. It has surpassed the 100% Fibonacci expansion level and the recent high. Breaking above the recent high indicates the emergence of an uptrend.

Currently, the price is moving within the Ichimoku Cloud, meaning there’s still a risk of reversal. However, with the possibility of a slower rate cut pace than expected, US interest rates are rising. Today’s US CPI report will likely be the key focus.

If the CPI surpasses expectations, a significant rate cut by year-end will become even more difficult, and USDJPY may seriously aim for 150 JPY. If it falls short of expectations, a correction is more likely, with a risk of the pair falling to the low 147 JPY range.

Day trading strategy (1 hour)

We analyze the 1-hour chart of USDJPY. Looking at the 1-hour RSI, a divergence has emerged, suggesting that bullish momentum is weakening, and the market may enter a corrective phase. With the US CPI upcoming, significant movements may be hard to anticipate, and a gradual decline to the mid-148 JPY range is possible.

Since the US CPI is in focus more than expected, today’s day trading requires careful attention.

As a strategy, if the CPI exceeds expectations, we consider a scenario where USDJPY targets 150 JPY, making dip-buying the strategy of choice. If the CPI falls short of expectations, we anticipate a decline to the low 147 JPY range and adopt a dip-buying approach. Depending on the results, we recommend either waiting or focusing solely on scalping throughout the day.

Support/Resistance lines

Here are the key support and resistance levels to consider moving forward:

• 148.50 JPY: 100% Fibonacci Expansion

Market Sentiment

USDJPY Sell: 32% / Buy: 68%

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.