Fundamental
Overview
The USD got under some
renewed pressure this week following some soft US data. In fact, we got lower
than expected US CPI
and PPI
data coupled with some weak jobless
claims figures. This led to a more dovish repricing in interest rates
expectations and a drop in Treasury yields.
On the JPY side, the
currency remains weak almost across the board as the BoJ is said to reduce its bond buying tapering plan and we continue to hear from
officials that a change in rates is not going to happen anytime soon. The
central bank continues to wait for US-Japan trade deal and the evolution of
inflation.
USDJPY
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that USDJPY is pulling back towards the 142.35 support following some soft US economic
data. If the price gets there, we can expect the buyers to step in with a
defined risk below the support to position for a rally into the 148.28 level
next. The sellers, on the other hand, will look for a break lower to extend the
drop into the 140.00 handle.
USDJPY Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that we’ve been ranging for quite some time here. The price is trading
right in the middle of two key levels. From a risk management perspective,
there’s nothing to do here other than waiting for the price to reach one of the
two key levels.
USDJPY Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can
see more clearly the recent price action with the break below the 144.35 level
leading to increased bearish momentum as the sellers piled in for a move into
the 142.35 level next.
If the price retests the
144.35 level, we can expect the sellers to step in with a defined risk above
the level to position for the drop into the 142.35 level. The buyers, on the
other hand, will look for a break higher to start targeting the 146.28 level
next. The red lines define the average daily range for today.
Upcoming
Catalysts
Today, we conclude the week with the University of Michigan
Consumer Sentiment report.
Watch the video below
This article was written by Giuseppe Dellamotta at www.forexlive.com.
