Today's Market Analysis
[Daily Chart]
[4-hour Chart]
.png "4-hour Chart")
Tokyo Timing Strategy Fundamental Expectation.
U.S. employment statistics surpassed market expectations.
Leading to dollar-buying momentum.
However, resistance was met, and a backtrack occurred, but after midnight, we saw a buying-back trend.
The USD/JPY closed around 144.98.
The 10-year Treasury yield also went up and then plateaued.
Thursday's selling was due to hints that the Bank of Japan might change its policy.
The Fed might end rate hikes from next year due to slowing inflation, raising the possibility of future cuts.
As the interest rate differential between the U.S. and Japan seemed set to narrow, the market saw a shift towards yen-buying and dollar-selling, even a sharp drop to the mid-141 yen range at one point - a decline of about 6 yen.
The focus is now on whether this trend of yen-buying and dollar-selling (downward movement) will continue.
Daily Chart
Friday ended with a 'lower shadow bullish candle' suggesting an uptrend, yet the overall trend remains downward, emphasizing caution if resistance is met to the upside!
Should the downtrend resume, there is room to fall to around 144.30, where the -2σ of the Bollinger Bands lies.
Given the range, it seems safer to aim for smaller, consistent gains by watching shorter time frames.
4-Hour Chart
The morning situation shows us above the 10EMA, so if support holds around 144.80, it suggests a 'flat to upward' trend.
If we can move into the 145 range, we can aim for the middle line around 145.50 to 145.60.
If it dips below 144.80, be cautious of a downward move, watching out for potential declines to around 144.50 , 144.30, and 144.15.
60-Minute Chart
With the Bollinger Bands and moving averages trending upwards, it suggests a 'flat to upward' bias, and it looks like it might break upwards soon.
Today’s USD/JPY Forecast
It might be best to wait and see how the Tokyo market reacts.
Based on the 4-hour and 60-minute charts, it looks like there might be an initial rebound, so 'flat to upward' where buying on dips looks attractive in the shorter time frames.
Whether we can sustain over the 145 mark is key.
If momentum takes us firmly into the 145 range, upper targets would be at around 145.07 to 145.10, 145.20, 145.35 , 145.50, and 145.60.
If however the upside seems heavy and starts to sag, watch out around 144.90, 144.80 to 144.75.
Crossing below that might suggest a shift to a selling stance, eyeing possible further drops to around 144.60 to 144.55, 144.40, or 144.30 to 144.25.
By 8:30 am, we are on the 145 yen level, so let's see how much momentum builds or what the Tokyo players will bring.
Fundamentally, the bias is towards a stronger yen, so be cautious of selling on rallies around the upper points.
USD/JPY, Today's Forecast Range
Upper points are around 145.07 to 145.10, 145.20, 145.35, 145.50, 145.60, 145.70, 145.90, and near 146.00.
Lower points are around 144.90, 144.80 to 144.75, 144.60 to 144.55, 144.40, 144.30 to 144.25, and 144.05 to 144.00.
