USDJPY Technical Analysis

USD

• The Fed left interest rates unchanged as expected at the last meeting 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.
• The US CPI beat expectations for the third
  consecutive month, while the US PPI came in line with forecasts.
• The US NFP beat expectations across the board
  although the average hourly earnings came in line with forecasts.
• The US ISM Manufacturing PMI beat expectations by a big margin with
  the prices component continuing to increase, while the US ISM Services PMI missed with the price index dropping to
  the lowest level in 4 years.
• The US Retail Sales beat expectations across the board by a
  big margin with positive revisions to the prior figures.
• The market now expects the first rate cut in
  September.

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 latest Japanese wage data came in line with expectations.
• The Japanese 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 got stuck in some consolidation just beneath the 155.00 handle as
the market might be awaiting some new catalyst to push into either direction. From
a risk management perspective, the buyers will have a much better risk to
reward setup around the previous resistance now turned support where we
can also find the confluence of the trendline and the
38.2% Fibonacci retracement level.
The sellers, on the other hand, will want to see the price breaking lower to
invalidate the bullish setup and position for a drop into the next major
trendline around the 146.00 handle.

USDJPY Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have
another trendline where the buyers can lean onto in case of a pullback. The
sellers, on the other hand, will want to see the price breaking lower to
position for a drop into the 151.92 support zone and
then target a break below it.

USDJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the rangebound price action between the 153.90 support and the 154.80
resistance. We can expect the sellers to step in around the top of the range
with a defined risk above it to position for a drop into the trendline. The
buyers, on the other hand, will likely pile in in case the price breaks higher,
although they will have a much better risk to reward setup around the
trendline.

Upcoming Events

Today we get the US Flash PMIs. On Thursday we will
see the latest US Jobless Claims figures. On Friday we conclude the week with
the BoJ Rate Decision, the Tokyo CPI and later in the day, the US PCE report.

See the video below

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