Fundamental Analysis

• USDJPY is rising into the upper 150 JPY range, with election-related trading driving USD buying.
• Overall, the forex market is seeing a continued rise in USD demand, while stock indices are facing profit-taking pressures.
• USDJPY is facing strong resistance at the 151 JPY level, with the 10-day moving average (MA) acting as a support line.

USDJPY technical analysis

Let’s analyze the daily USDJPY chart. The pair is pushing towards the 151 JPY level. Historically, the 10-day MA tends to serve as a support line in strong markets, and this time too, the pair has rebounded from the 10-day MA, reaching new highs.

When applying a Fibonacci retracement to the recent major downtrend, the 50% retracement level is found at 150.70 JPY. The 50% retracement line is considered an important level, where selling pressure tends to peak. Additionally, 151.070 JPY marks the R2 resistance on the monthly pivot, which is a very strong resistance level.

Looking at the MACD, the histogram is starting to fall below the signal line, indicating a possible weakening in the bullish trend. The focus will be whether USDJPY can break clearly above the 151.070 JPY level.

Day trading strategy (1 hour)

Next, we analyze the 1-hour USDJPY chart. On the 1-hour chart, USDJPY continues to rise with support from the 10-hour MA. It has risen to 150.88 JPY, and there seems to be some profit-taking as the market reaches this level. The 240-hour MA is also being noted, which is interesting.

With US stock indices also entering a corrective selling market, we may see USDJPY’s rise pause. It could be an opportunity for a counter-trade, selling around the 151 JPY level.

The day trading strategy is to initiate a new sell position at 151.07 JPY, set a stop-loss at 151.25 JPY, and aim for profit-taking around 150.35 JPY.

Support/Resistance lines

The following support and resistance levels should be considered going forward:

• 151.00 JPY: Round number / Monthly resistance line
• 150.30 JPY: Fibonacci 50% retracement

Market Sentiment

USDJPY Sell: 75% Buy: 25%

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.