Fundamental Analysis

• The United States and China made a joint announcement to drastically reduce tariffs, surprising global markets.
•  The U.S. will slash tariffs on Chinese goods from 115% to 30%, while China will lower tariffs on U.S. goods to 10%. 
• These actions triggered a significant shift toward risk-on sentiment, leading to broad-based USD buying and a rally in equities.

USDJPY Technical Analysis

USDJPY responded strongly to the surprise announcement, breaking above the 52-day moving average and rising to around 148.35 JPY. The pair is now approaching the upper edge of the Ichimoku Cloud.

A closer look at the Ichimoku system reveals:

• The Chikou Span has crossed above the candlesticks
• The Tenkan-sen has crossed above the Kijun-sen
• If the price breaks above the cloud, a bullish “Three Line Break” (Sanyaku Kouten) signal will be confirmed

RSI currently stands at 64, indicating stable upward momentum.

Day trading strategy

On the hourly chart, USDJPY rallied from the high 145 JPY range to approximately 148.50 JPY following the tariff news. RSI has dipped from overbought levels near 70, suggesting some short-term profit-taking pressure.

However, the broader geopolitical landscape supports risk appetite, with not only U.S.-China easing tensions but also a ceasefire between India and Pakistan reinforcing a peaceful global outlook.

Intraday Trading Strategy:

• Buy on dips
• Entry: Around the pivot point at 147.60 JPY
• Take Profit: 148.50 JPY
• Stop Loss: 147.30 JPY

Support/Resistance lines

Key support and resistance lines to consider:

• 147.60 yen – Pivot Point

Market Sentiment

USDJPY positioning:

• Short: 61%
• Long: 39%

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.