USD/JPY Today's Market Analysis
【Daily Chart】
【4-Hour Chart】
Daily Chart
Yesterday failed to maintain the previous day’s trend towards a weaker yen, with selling back on the rise.
However, the lower end remained somewhat resilient.
The result was a bearish candle.
For today, I’m leaning towards a ‘sideways to bearish’ outlook, looking to target selling on rallies.
Support is around the 143.30 level, near the -1σ Bollinger Band, and the 143.20 area where there’s a trendline support.
Breaking below these could set us into a selling mode towards 143.00, reaching for the 142.80 zone where the 200-day moving average lies.
Should there be an upward move, around 143.80 to 143.90 seems likely to act as resistance.
4-Hour Chart
In the 4-hour chart, the Bollinger Bands and moving averages are pointing upwards, which would suggest a bullish perspective.
However, the candlestick two sticks back was bullish, but the previous one was bearish with a lower high, hinting that there might be overhead resistance.
Additionally, this morning’s candle is positioned below the 10 EMA, which is at about 143.55.
If the resistance trendline near 143.80 serves as a current ceiling, then we're leaning more towards a ‘sideways to bearish’ outlook.
I’m closely watching to see whether we break below the 143.20 mark.
60-Minute Chart
The 60-minute chart shows the range moving sideways, which suggests if the 4-hour chart is looking to trim its high, then any upward movement could invite selling back in.
If it doesn’t reclaim those highs and breaks lower, that's the scenario I'm anticipating.
With a ‘sideways to bearish’ bias, I'm looking to seek selling opportunities on pullbacks in the lower time frames.
Key resistance on the 60-minute chart is around 143.57 and 143.65. If a downturn begins, the 143.28 level will be critical to watch—if we break below this, we should be on alert for further selling.
If Tokyo sellers step in, we could see movement towards 143.00.
Fundamental Forecast
In yesterday's session was the anticipated BoJ Monetary Policy Meeting, which resulted in maintaining the current status quo, leading to another bout of yen weakening
The expectation of interest rate normalization wasn't met, and a continuation of easing policy was inferred from the conference.
This led to an increase in both USD/JPY and GBP/JPY, along with a gradual uptrend that followed.
Moving forward, the focus may shift to the Federal Reserve and potential interest rate cuts.
Whether or not the yen’s weakening continues is tentative, and we may see phases of yen strengthening.
With major monetary policy events out of the way, we could now see reduced market participation over the Christmas holiday period, possibly leading to less volatility.
Today’s USD/JPY Forecast
Overall, the sentiment is ‘sideways to bearish’ so I’d be inclined to target selling on pullbacks in the lower timeframes.
In the morning, there is a chance for a slight recovery due to an oversold condition, making the state of play around 8 am worth watching.
The 4-hour chart shows the 10 EMA at 143.55, which is a potential cap on gains.
The -2σ mark of the 60-minute Bollinger Band is around 143.25, serving as a pivotal line—if we break below here, we may see levels near 143.15, and the 4-hour chart’s 25-day line around 143.05 to 143.00.
With the possibility of a bounce at the round number but also watch for a break lower.
Moreover, if we cross above the 143.55 mark, watch for resistance near 143.65, the Three Buddhas’s point around 143.70 to 143.75, up to around 143.85.
Any retracements might test these levels, but the upside seems to be limited.
USD/JPY Today's Forecasted Range
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