Caution is warranted in making any decisions.

USD/JPY Today's Market Analysis

【Daily Chart】

【4-Hour Chart】

Daily Chart

Yesterday saw dominance in dollar buying, rising close to last Friday's highs following the U.S. employment figures.

Today's momentum suggests the possibility of breaching those highs.

The daily chart also shows the Bollinger Bands' +2σ near yesterday’s top at around 145.90 yen.

This area might act as a resistance line.

Considering the similarity in the 4-hour chart, we can anticipate a possible adjustment phase.

Still, the continued dollar buying strength could lead to prices consolidating at these higher levels instead of adjusting, potentially pushing beyond last Friday's highs.

Caution is warranted in making any decisions.

4-Hour Chart

Similarly to the daily chart, it is situated below the Bollinger Bands' +2σ, indicating that the region around 145.85 yen could be the next resistance line.

A slight adjustment is possible.

However, as of this morning, there's reluctance to move downward.

We might see a test of last weekend's high at 145.96 yen before any potential decline.

It's important to watch the candlestick formation at 11 a.m., when the 4-hour chart updates.

60-Minute Chart

Shows an upward tendency of the Bollinger Bands and the moving average line, suggesting a prevails in dollar buying.

With the market in a bollinger walk between +2σ and the 10EMA, focus is on the 145.57 yen level where the 10EMA lies.

If this neckline holds, the outlook remains "sideways to bullish”.

If it breaks down through the 10EMA, be alert for a potential adjustment leading to a fall towards the middle line.

Tokyo Session Strategy Fundamental Forecast

Expectation of strong dollar buying continues before the U.S. CPI consumer price index release.

Dollar-supportive material includes.

A stronger market anticipation for the U.S CPI year-over-year, which might support dollar buying.

Another factor is the weakening yen due to retreating expectations for the Bank of Japan to exit negative interest rates early after the recent Noto Peninsula earthquake.

Official statements suggest, "The Bank of Japan's exit from negative interest rates is likely to happen after the spring wage negotiations in March''.

"There's a high likelihood of simultaneous lifting of negative interest rates and the YCC framework in April" ⇒ Outlook leans towards sustained dollar buying strength.

Today's USD/JPY Forecast

Fundamentally, the dollar buying dominance is projected to continue in the short term, while technically attention is focused on whether it will continue to rise and update last week's highs.

Both daily and 4-hour charts are situated below the Bollinger Bands' +2σ, and since the +2σ matches last weekend's highs, a potential selling response is expected.

However, today's market tends towards an adjusting phase.

Despite a strong floor preventing a decline this morning, selling is difficult, and initiating long positions from here is challenging.

The 145.57 yen level indicated by the 60-minute chart's 10EMA is the current neckline.

If supported around this area, the outlook remains "sideways to bullish," with resistance points at 145.70 to 145.75 yen and the recent high at 145.83 yen.

If the market surpasses these, expect the next upper resistance points from last weekend's high at 145.96 to 146.00 yen.

Be mindful of potential selling on the retracement if a new high is made.

If the market dips below the 145.57 yen level marked by the 60-minute chart's 10EMA, watch for support around the 60-minute middle line at 145.35 to 145.30 yen or the 4-hour chart's +1σ at approximately 145.20 yen.

Tonight's U.S. consumer price index could result in a solid floor and continuation of dollar buying.

If you sense the market isn't adjusting or declining, following with a dip-buying strategy may be prudent.

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