Fundamental Analysis

• Most markets saw no significant movement during the Christmas holiday.
• Bank of Japan (BoJ) Governor reiterated the importance of spring wage negotiations and U.S. government policies in his speech.

USDJPY Technical Analysis

Analyzing the USDJPY daily chart reveals that the pair has been trading above the 10-day moving average since December 9. The 10-day moving average often acts as a support line during strong trends, confirming the current strong uptrend.

The candles’ wicks touching the 10-day moving average indicate that it is functioning as support. Whenever the price approaches the 10-day moving average, dip-buying seems to occur.

As long as the price stays above the 10-day moving average, trades should generally favor a bullish outlook.

Day trading strategy (1 hour)

The 1-hour USDJPY chart indicates a narrow range, showing no clear directional movement. With the holiday season ending, international traders are likely to shift into “New Year mode,” potentially initiating new trades. Unlike Japan, where the New Year holiday is celebrated differently, there is a possibility of large-scale trades taking place at the beginning of the year.

Given today’s thin market conditions, the primary strategy remains dip-buying; however, limit orders should be used sparingly.

If there is a significant drop in price, a buy entry could be considered at some point.

Support/Resistance lines

Key support and resistance lines to consider:

• 157.920 JPY: Recent daily high
• 156.75 JPY: Key support level

Market Sentiment

USDJPY: Sell: 68% / Buy: 32%

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.