Fundamental
Overview
The USD remains under
pressure as the recent economic data came in on the softer side. That weighed
on Treasury yields and the market pricing which saw a more dovish repricing in
expectations.
Overall, the market
continues to expect two rate cuts in 2025, but the path of least resistance favours
more rate cuts. Therefore, the greenback will need stronger data to trigger a
more hawkish repricing and get a boost.
On the JPY side, the BoJ
kept interest rates unchanged at 0.5% and reduced the bond tapering plan for
fiscal year 2026 as expected. It was basically a non-event which is also
reflected in the market given that the exchange rate is almost unchanged on the
day.
USDJPY
Technical Analysis – Daily Timeframe
USDJPY Daily
On the daily chart, we can
see that USDJPY eventually bounced near the key 142.35 support as the pair continues to
range between the 142.35 and 146.00 level. The buyers keep on stepping in
around the support to target a rally into the 148.28 level, while the sellers
will need a break below the 142.35 support to extend the drop into the 140.00
handle next.
USDJPY Technical
Analysis – 4 hour Timeframe
USDJPY 4 hour
On the 4 hour chart, we can
see that the price yesterday broke above the 144.30 zone which has been acting
as kind of a barometer for the near-term momentum. The buyers will now likely
pile in around the zone to position for a rally into the 146.28 level next. The
sellers, on the other hand, will want to see the price falling back below the
zone to target the 142.35 support again.
USDJPY Technical
Analysis – 1 hour Timeframe
USDJPY 1 hour
On the 1 hour chart, we can
see that we have a minor upward trendline
defining the bullish momentum on this timeframe. If we get a pullback into the
trendline, we can expect the buyers to lean on the trendline with a defined
risk below it to position for a rally into the 146.28 level. The sellers, on
the other hand, will look for a break lower to increase the bearish bets into the
142.35 support next. The red lines define the average daily range for today.
Upcoming
Catalysts
Today, we get the US Retail Sales data. Tomorrow, we have
the US Jobless Claims and the FOMC Policy Decision. On Friday, we conclude the
week with the Japanese CPI.
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