Fundamental Analysis

• President Biden announced that Israel has reached a ceasefire agreement with Lebanon.
• Former President Trump revealed plans to impose additional tariffs on China, Canada, and Mexico.
• Major currency pairs experienced temporary and intense sell-offs.

USDJPY Technical Analysis

An analysis of the daily chart for USDJPY reveals a potential shift from an uptrend to a downtrend. Key observations include:

• USDJPY has broken below the baseline of the Ichimoku Kinko Hyo and updated recent lows.
• The pair has also fallen below the 61.8% Fibonacci retracement level, signaling a possible transition to a bearish trend.

The RSI is currently at 52; however, if it drops below 50, it would indicate bearish momentum from an RSI perspective.

Despite USD strength due to the Israel-Lebanon ceasefire, JPY remains the most bought currency, causing USDJPY to react with a decline. Currently trading at 152.80 JPY, a further drop to the lower 151 JPY range is anticipated.

Day trading strategy (1 hour)

An analysis of the 1-hour chart for USDJPY indicates a downward trend:

• Lower highs have been observed, and the pair has broken recent lows.
• The conversion line is acting as a resistance level, reinforcing the downtrend.

Strategy:

• Aggressive selling is recommended, with a target around 151.30 JPY.
• Today’s market conditions may favor active trading. However, if the pair breaks above 153.25 JPY, a stop and reassessment of the strategy is advised.

Support/Resistance lines

Key support and resistance lines to consider:

• 153.30 JPY – Fibonacci 61.8%

Market Sentiment

USDJPY Sell: 65% / Buy: 35%

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*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.