USD/JPY Daily Chart Analysis
Yesterday's daily chart for USD/JPY exhibited a strong presence of return selling, yet as the New York trading hours approached, a shift towards buying emerged, culminating in a bullish candle with a long lower shadow. Despite today's market showing resistance to the upside, maintaining support around the 147.45 level, near the 10-day Exponential Moving Average (EMA), keeps the outlook 'sideways to bullish' from a daily perspective. The 4-hour chart, laden with multiple resistance lines, suggests that if the upside remains heavy, a gradual decline may ensue. *This sentiment reflects a personal hope.
4-hour Chart Observations
During the New York trading session, the 4-hour chart showcased an uptrend that soon gave way to return selling, indicating a struggle for the price to ascend further. Key levels to watch include the 10-day EMA at 147.60, the Ichimoku Cloud's baseline, and a resistance trendline at 147.83. Whether prices can continue an upward trajectory above the daily 10-day EMA is uncertain. If the 10-day EMA becomes a resistance point, a 'sideways to bearish' outlook seems appropriate.
60-minute Chart Insights
The 60-minute chart suggests an opportunity to 'buy the dips' following a significant overnight rise. A critical juncture is set at the Fibonacci 50% retracement level of 147.50, aligning with the middle line and the Ichimoku baseline, which could bolster a bullish stance if it holds. A breach here could lead to a drop towards 147.40, at the 61.8% retracement level, and potentially further down to the 147.30 to 147.25 range, extending to approximately 147.15 to 147.10.
Strategy for Tokyo Trading Hours
Fundamental Forecast
Predictions for the day suggest dominance of return selling, with the market likely showing a bearish range yet resilient to sharp declines. As trading moves to European hours, both USD/JPY and GBP/JPY may witness new lows, with USD/JPY expected to bounce back around the 147 level. By the time New York trading hours come around, a rise to just below 148 is anticipated without a definite direction. GBP/JPY, which didn't hit the daily middle line, recovered after a dip to about 186.50. Could USD/JPY be positioning itself ahead of tonight's US FOMC announcement? Additionally, with the UK BOE interest rate announcement looming, GBP/JPY seems tilted towards a selling bias.
Today's USD/JPY Forecast
The market has displayed a lack of clear direction, ranging over the past few days. Yesterday's slight bearish tone showed reluctance to decline, and the trend has been slowly descending after an increase during last night's New York session. As of this morning, with the daily chart holding above the 10-day EMA and the 60-minute chart above the middle line, buying the dips seems to be the strategy of choice. The 15-minute chart, developing within the -2σ band of the Bollinger Bands, also points to difficulty in selling, hinting at a temporary bullish inclination.
It's crucial to stay aware of the trading range today and be cautious of any upticks, especially since the 4-hour chart reveals numerous resistance lines overhead. Like yesterday, the market may experience a rise followed by a return to selling, advising traders to proceed with caution.
With several US economic indicators set to be released tonight, it might be prudent to observe the market until then.
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