Fundamental Analysis

• The U.S. Consumer Confidence Index exceeded all expectations and surged.
• Gold is hitting new all-time highs, surpassing the key level of 2,770 USD.

USDJPY technical analysis

Analyzing the daily chart of USDJPY, the pair has clearly broken above the 200-day moving average, signaling a strong upward trend. It has also closed above 153.30 JPY, corresponding to the 61.8% Fibonacci retracement, and tested the 154 JPY level for the second consecutive day.

The 10-day moving average is approaching the 200-day moving average, and attention is on whether a golden cross will form. The 10-day moving average has been functioning as a support line, and USDJPY has remained above it throughout October.
The Bank of Japan’s monetary policy meeting is being held today and tomorrow, but a rate hike is unlikely. Ongoing optimism about the U.S. economy is believed to be fueling continued USD buying.

Day trading strategy (1 hour)

Analyzing the 1-hour chart of USDJPY, the pair is forming a double top with a high of 153.88 JPY. However, strong buying on dips is also present. Buying interest has emerged at the key Fibonacci level of 153.30 JPY on the daily chart, resulting in a narrow range.

The U.S. ADP Employment Report will be released today. There have been reports of increased layoffs and a reduction in job openings, raising the possibility of a weak outcome. There is also a chance that USDJPY could fall to the 152 JPY range.

For day trading, targeting a deeper pullback is advisable. Consider setting a buy limit at 152.65 JPY, the lower boundary of the Ichimoku Cloud, with a stop at 152.35 JPY and aiming to take profit in the high 153 JPY range.

Support/Resistance lines

The following are key support and resistance lines to consider:

• 153.88 JPY – Recent High
• 151.50 JPY – Key Level

Market Sentiment

USDJPY: Sell 70% / Buy 30%

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.