Fundamental
Overview
The USD continues to lose
ground against most major currencies although the fundamental backdrop remains
unclear. The most popular narrative is that everyone is selling US assets, and
the greenback is losing its reserve status as a consequence of the aggressive
trade war.
Such big claims are
generally made at tops or bottoms, so it calls for caution. Anyway, that’s the
trend for now and we will need some catalyst to reverse it, although it’s hard
to know which one it’s going to be given that things change on a dime lately.
On the JPY side, the
currency has been driven mainly by global events rather than domestic
fundamentals. It’s been supported more by the risk-off flows rather than
interest rates expectations as the market doesn’t see the BoJ hiking rates
anymore this year.
USDJPY
Technical Analysis – Daily Timeframe
USDJPY Daily
On the daily chart, we can
see that USDJPY continues its downward trajectory towards the 140.00 handle. If
the price gets there, we can expect the buyers to step in with a defined risk
below the level to position for a rally back into the major trendline.
The sellers, on the other hand, will want to see the price breaking lower to
increase the bearish bets into new lows.
USDJPY Technical
Analysis – 4 hour Timeframe
USDJPY 4 hour
On the 4 hour chart, we can
see that the price is trading near the recent lows. From a risk management
perspective, the sellers will have a better risk to reward setup around the
144.56 level to position for further downside. The buyers, on the other hand,
will want to see the price breaking above the 144.56 level to start targeting a
bigger pullback into the 148.25 level next.
USDJPY Technical
Analysis – 1 hour Timeframe
USDJPY 1 hour
On the 1 hour chart, we can
see that the recent low around the 142.00 handle has been holding up pretty
well. This is where we can expect the buyers to step in with a defined risk
below the level to position for a pullback into the 144.56 level. The sellers, on
the other hand, will look for a break lower to increase the bearish bets into
the 140.00 handle next. The red lines define the average daily range for today.
Upcoming
Catalysts
This week we don’t have much on the agenda and
it’s going to be shortened by the Good Friday holiday. On Wednesday, we have
the US Retail Sales and Fed Chair Powell speaking. On Thursday, we get the
latest US Jobless Claims figures, while on Friday we conclude the week with the
Japanese CPI. As a reminder, the market is focused on tariff negotiations at
the moment, so the data is not as market-moving as it used to be in the past months.
