USDJPY Technical Analysis

USD

• The Fed left interest rates unchanged as
  expected with basically no change to the statement. The Dot Plot still showed
  three rate cuts for 2024 and the economic projections were upgraded with growth
  and inflation higher and the unemployment rate lower.
• Fed Chair Powell
  maintained a neutral stance as he said that it was premature to react to the
  recent inflation data given possible bumps on the way to their 2% target.
• The US CPI and
  the US PPI beat
  expectations for the second consecutive month.
• The US Jobless Claims beat
  expectations.
• The latest US Manufacturing
  PMI
  beat expectations while the Services PMI missed slightly. Both the measures
  remain in expansion though.
• The US Consumer
  Confidence missed expectations although the labour
  market details improved.
• The market expects the first rate cut in June.

JPY

• The BoJ finally exited the negative interest rates
  policy as expected at
  the last meeting raising interest rates by 10 bps bringing the rate to a target
  between 0.00-0.10%. Moreover, the central bank scrapped the yield curve control
  and the ETF purchases, while maintaining QE in place.
• The latest Unemployment Rate missed expectations although it
  continues to hover around cycle lows.
• The Japanese PMIs improved further for both the
  Manufacturing and Services measures although the former remains in
  contractionary territory.
• The Japanese wage data beat expectations by a big margin.
• The Tokyo CPI, which is seen as a leading
  indicator for National CPI, came in line with expectations.
• The market expects another rate hike
  from the BoJ this year although the timing remains uncertain.

USDJPY Technical Analysis –
Daily Timeframe

On the daily chart, we can see
that USDJPY is consolidating just beneath a crucial resistance level at
151.92. In fact, we can notice that the pair has formed a big ascending triangle and a
break above the resistance could trigger a strong move to the upside. We can
expect the sellers to step in around these levels with a defined risk above the
resistance to position for a drop all the way back to the bottom trendline of the
triangle. The buyers, on the other hand, will want to see the price breaking
higher to increase the bullish bets and target new highs.

USDJPY
Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price has
been ranging between the 151.00 support and the 151.92 resistance as the lack
of key economic data and the risk of an intervention put a lid on further
gains. This should change next week as we get many important US data and upside
surprises will likely lead to a break of the resistance. Conversely, weak US
data should trigger a selloff in the pair with a break below the 150.00 handle
increasing the bearish momentum.

USDJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with the pair doing basically nothing for the
entire week. Traders can keep on “playing the range” by buying at support and
selling at resistance until we get a breakout.

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This article was written by FL Contributors at www.forexlive.com.