Fundamental Analysis

• The Federal Reserve Board (FRB) members have hinted at a cautious stance on rate cuts, suggesting only minor policy actions.
• U.S. stock indices continue to hit record highs, and U.S. interest rates are rising.

USDJPY technical analysis

Analyzing the monthly chart of USDJPY, we display the 12-month (1-year), 24-month (2-year), and 120-month (5-year) moving averages. USDJPY is approaching the 150JPY mark, with the 1-year moving average acting as resistance, while the 2-year moving average serves as support. It appears the pair is testing these levels.

The RSI has bounced off the 50 level, indicating a pullback buy occurred. When drawing Fibonacci retracement, a reaction can be observed at the 38.2% level, leading to a strong rebound.

With the U.S. presidential election in November, USD strength seems likely to continue. Considering the RSI bouncing at 50, if USDJPY breaks above the 12-month moving average, it may rise again towards the 152JPY level.

Day trading strategy (1 hour)

Analyzing the weekly chart of USDJPY, the 52-week moving average is acting as resistance. USDJPY has rebounded at the 61.8% retracement of the recent major uptrend and is currently moving above the 38.2% level.

The RSI has reached the 50 level, marking a shift from a downward trend to a neutral stance. While upward momentum is weakening, it remains uncertain whether a reversal will occur.

For swing trading, the current strategy favors selling into rallies. If USDJPY rises to the mid-150JPY range, selling pressure is expected to increase. A stop should be placed at 152JPY, and the target for taking profit is around 142JPY.

Support/Resistance lines

The key support and resistance levels to watch moving forward are as follows:

• 150.20JPY … 12-month (1-year) moving average
• 148.50JPY … Weekly Fibonacci 50%

Market Sentiment

USDJPY Short: 64% Long: 36%

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.