Stay ahead in Forex trading with our comprehensive USD/JPY market analysis.From pivotal chart points to fundamental factors affecting trades, we uncover the technical patterns for today's strategy.
Daily Chart
On the daily chart, a long upper wick bearish candlestick was confirmed at the end of last week, marking a notable moment as we now turn our attention to whether there will be a corrective phase at these high price levels.However, fundamentally there's no selling factor, and the trend of buying USD continues.It seems prudent to wait and see how the Tokyo market reacts.
Considering a "sideways range," think about going short from a slightly bearish perspective; if the market resists going lower and then rises, switch to a long position!Let's respond flexibly to the situation.Key daily chart resistance points are around 148.30, 148.50, 148.80, and 149.00.Key daily chart support points are around 148.00, 147.80, 147.60, 147.50, and 147.35.
4-Hour Chart
On the 4-hour chart, there are consecutive long upper wick bearish candlesticks, and considering the MACD is showing a death cross, it may be easy for selling on rallies to occur with a slight bearish bias.However, at the morning snapshot, the price is above the middle line, so the bullish view maintains!
If the price breaks below around 147.95, which is the middle line level, we may shift to a "sideways to bearish" outlook, aiming for around 147.70 to 147.60 and 147.40.Be cautious of selling on rallies even if it rises, especially around 148.50 and 148.70.
1-Hour Chart
For the 1-hour chart, the Bollinger Bands and the moving average are flatlining, resulting in a lack of directional movement in the rate.With the sideways trend continuing even on the lower timeframe, it's wise to wait for Tokyo's reaction and follow the break beyond the neckline.
The upper limit of the neckline is around 148.30, and the lower limit is around 148.00.
Tokyo session strategy, fundamental expectations
Last week saw a persistent dominance of buying USD.The retreat of the Bank of Japan's negative interest rate elimination speculation, plus the Noto Peninsula earthquake, has led foreign investors to continue the dollar buying since the beginning of the year.Strong US economic indicators, stable employment, and persistent inflation pressures, seem to dampen expectations of a rate cut in March?.
A larger-than-expected decrease in US initial jobless claims shows resilience in the US labor market.US bond yields are rising, and the USD/JPY is also climbing.Will the preference for buying USD continue aiming for 150 yen?
This week, the market is watching for the US GDP release.If the figures suggest a slowdown or are weaker than expected, it could lead to expectations of a rate cut in March and potential selling of USD.Conversely, if the US GDP outperforms market expectations, with consumer spending remaining strong, there's a high chance of seeing a stronger USD.
Today's USD/JPY forecast
The daily chart has confirmed a high-level long upper wick bearish candlestick, which could initially serve as a cue to sell!
The hourly and lower charts are almost flat, lacking directionality.So, let's wait for Tokyo's reaction before following the flow.
From a daily perspective, "sideways to bearish" is preferable, and if there's resistance to a downturn, it could be interpreted as a sideways range, suggesting a bearish-biased range trading strategy.
Selling has started after 8 o'clock, so if we break below around 148.00, which is the lower limit of the neckline, the trend may gradually drift lower with sellers in control.However, fundamentally there are no particular reasons to sell, and even if it drops, the market could still be supported by buying the dips, so it's important to secure profits wisely.
We may also need to wait for tomorrow's Bank of Japan Monetary Policy Meeting announcement.If the market quiets down during the day, it could be wise to wait and see, and prudent to wait for the European players post-3 PM.
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