Fundamental Analysis

• The South Korean President has declared martial law, triggering risk-off sentiment and a surge in yen buying.
• Although the martial law was subsequently lifted, USDJPY recovered from the 148 JPY range.

USDJPY Technical Analysis

Analyzing the USDJPY daily chart: After rising to 150.17 JPY, USDJPY fell sharply to around 148.65 JPY due to the martial law announcement in South Korea, as risk-off yen buying intensified. USDJPY appears to be respecting Fibonacci retracement levels, with the next downside target estimated at 148.15 JPY, the 50% retracement level.

The MACD histogram is beginning to form a trough, and the MACD line has fallen below zero. This suggests a continuation of heavy resistance to the upside, indicating a high probability of further declines.

Additionally, a dead cross of the short-term GMMA with the long-term GMMA reinforces the bearish signal.

Day trading strategy (1 hour)

On the 1-hour chart, USDJPY remains on a downward trend but shows significant divergence. While price continues to make new lows, the MACD is trending higher. The gap between the 12-period and 24-period moving averages is narrowing.

A descending parallel channel can be identified, with the upper boundary near 149.80 JPY. Focus remains on whether the pair will sustain the channel. If USDJPY breaks above this channel, it could climb back to the 150.50 JPY range.

Day Trading Approach:
The preferred strategy is to sell on retracements.

• Place sell limits at the channel’s upper boundary, around 149.85 JPY and 150.50 JPY.
• Stop loss: 150.80 JPY.
• Take profit: 148.15 JPY.

Support/Resistance lines

Key support and resistance lines to consider:

• 150.17 JPY: Fibonacci 38.2%
• 148.15 JPY: Fibonacci 50%
• 146.12 JPY: Fibonacci 61.8%

Market Sentiment

USDJPY: Sell: 46% / Buy: 54%

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