Fundamental Analysis

• No significant fundamentals; most markets are experiencing profit-taking.
• Both Japanese and U.S. stock markets are down, reflecting a calm year-end and New Year mood.

USDJPY Technical Analysis

On the daily chart, USDJPY has broken below the conversion line and dropped under 157JPY. With limited market participants, there is no strong movement to buy USD, which can naturally be interpreted as profit-taking.

The stock market is also ending 2024 with a decline. Although 2024 was a year of significant stock price gains, the cooling of market enthusiasm indicates that participants are beginning to analyze the current market conditions more carefully. This situation leads to fewer buyers in the market. During the year-end and New Year period, many investors are expected to reassess their portfolios and analyze the market anew.

Looking ahead to 2025, it may be necessary to consider scenarios where more investors take a calmer approach toward the currently overheated market, potentially leading to a decline.

Day trading strategy (1 hour)

On the 1-hour chart, USDJPY experienced a sharp drop from 158JPY to below 157JPY. This movement appears to be driven by profit-taking. Although there are risks due to uncertainties surrounding the Trump administration, the strong focus on the interest rate differential between Japan and the U.S. suggests that USDJPY may form a temporary dip before resuming its upward trend.

Today is New Year’s Eve, and tomorrow marks a holiday for forex markets worldwide. Many brokers will not be accepting orders. Considering past instances of flash crashes at the beginning of the year, today serves as an opportunity to reflect on 2024 rather than engage in trading.

Support/Resistance lines

Key support and resistance lines to consider:

• 155.95JPY: Recent critical low
• 154.48JPY: Previous breakout 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.