Fundamental Analysis

• The U.S. Consumer Confidence Index declined, leading to continued drops in U.S. stock indices.
• USDJPY shows a strong yen appreciation trend, fluctuating in the mid-148 JPY range.

USDJPY Technical Analysis

Analyzing the daily chart of USDJPY, the 200-day moving average has started to turn downward. Additionally, a death cross has formed with the 10-day moving average, reinforcing the downtrend. The 61.8% Fibonacci Expansion level is acting as a strong resistance, with the recent rebound high forming precisely at this level. The 100% Fibonacci Expansion level corresponds to 146.85 JPY, while the 161.8% level aligns with the 142 JPY range. U.S. stock prices are declining, and concerns over a weakening U.S. economy are gradually spreading in the market.

From July to September last year, USDJPY also experienced a yen appreciation phase, dropping to 139 JPY. This time, economic indicators have worsened, with concerns over U.S. tariffs and significant reductions in federal employees adding to economic uncertainty. There is a possibility of a second significant yen appreciation phase, making it necessary to remain cautious.

Day trading strategy (1 hour)

On the 1-hour chart, the 10-period moving average has become a key level, and a strong downward trend is evident. USDJPY has already declined to 148.55 JPY and is expected to continue falling towards the 100% Fibonacci Expansion level at 146.85 JPY. A bearish engulfing candlestick pattern has also appeared on the daily chart, indicating strong selling pressure. Traders should look for opportunities to enter short positions while being mindful of potential retracements.

For a day trading approach, a market order entry is one option, but since RSI is at 30, waiting for a slight rebound before entering may be more effective. If the price rises above 150.25 JPY, a stop-loss should be placed, while the profit target should be set at 146.85 JPY.

Support/Resistance lines

Key support and resistance lines to consider:

• 147.80 JPY – Monthly support level

Market Sentiment

USDJPY – Sell: 36% / Buy: 64%

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.