USD/JPY Technical Analysis


On the daily chart below, we can
see that after breaking out of the channel, it was pretty much a one-way road
for the pair. USD/JPY is correlated with US yields, which were rising fast in
the past weeks, and this yielded (pun intended) such a big rally. We can see
that the buyers couldn’t break the 138.00 handle and the price pulled back
notably in the past days.

US yields fell even if the Fed
Chair Powell signaled the chance of a 50bps hike and a higher
terminal rate. Maybe the market is already pricing a policy mistake which would
lead to a deep recession, or it may be just a correction from overextended
levels. The moving
averages point to the upside and the buyers will keep on leaning on them as
support as long as the fundamentals remain in favour of the USD.

On the 4 hour chart below, we can
see that the price has pulled back right to the trendline. The recent spike up was caused
by the BoJ which kept its monetary policy
unchanged even though there was some expectation of a surprise. Maybe the
entire move down was indeed just positioning into the BoJ meeting and now that
is gone, the market will focus to the next big event: the NFP
report today.

On the 1 hour chart below, we can
see that the recent spike up made the moving averages to cross upwards and the
price is now testing the red long period moving average. This looks like a
clear setup for today’s NFP report:

If the data beats expectations, we should see a
rally and the buyers firmly in control targeting a breakout of the 138.00

If the data misses expectations, we should see a
breakout of the trendline and sellers targeting the 134.50 support.

Denial of responsibility! is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – at The content will be deleted within 24 hours.

Read original article here

Leave A Reply