USDJPY Technical Analysis

USD

• The Fed left interest rates unchanged as
  expected at the last meeting and dropped the tightening bias in the statement.
• The US CPI and
  the US PPI beat
  expectations for the second consecutive month.
• The NFP report beat
  expectations on the headline number, but the unemployment rate and the average
  hourly earnings missed notably. Moreover, the US Jobless Claims
  yesterday beat expectations across the board with a big positive revision to
  Continuing Claims.
• The latest US ISM
  Manufacturing PMI missed expectations by a big margin
  remaining in contraction with the US ISM Services
  PMI
  following suit but holding on in expansion.
• The US Retail Sales missed
  expectations across the board although the data improved from the prior month.
• The market expects the first rate cut in June.

JPY

• The BoJ kept its monetary policy unchanged as expected at the last meeting
  with interest rates at -0.10% and the 10 year JGB yield target at 0% with 1% as
  a reference cap.
• The last Japanese CPI beat expectations although all
  measures eased further from the prior readings.
• The latest Unemployment Rate remained unchanged hovering around
  cycle lows.
• The Japanese PMIs improved for both the Manufacturing
  and Services measures although the former remains in contractionary territory.
• The Japanese wage data beat expectations by a big margin
  raising the odds of an earlier than expected BoJ exit from negative rates.
• The Tokyo CPI, which is seen as a leading
  indicator for National CPI, recently came in line with expectations with the
  measures increasing from the prior report.
• The market sees a 50/50 chance that
  the BoJ hikes rates in March.

USDJPY Technical Analysis –
Daily Timeframe

On the daily chart, we can see
that USDJPY bounced on the key 146.60 level and pulled back into the 148.80
level following strong US data releases. We can notice that we have also the confluence of the
50% Fibonacci retracement level
and red 21 moving average around
this level. This is where we can expect the sellers to step in with a defined
risk above the level to position for a drop into new lows. The buyers, on the
other hand, will want to see the price breaking higher to invalidate the
bearish setup and position for a rally back into the highs.

USDJPY
Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a
counter-trendline where we
can find the confluence with the 61.8% Fibonacci retracement level and the red
21 moving average. This is where we can expect the buyers to step in with a
defined risk below the trendline to position for a break above the 148.80 level
with a better risk to reward setup. The sellers, on the other hand, will want
to see the price breaking lower to invalidate the bullish setup and increase
the bearish bets into new lows.

USDJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with all the key levels marked on the chart.
There’s not much else to do here other than waiting for the setups to work out.

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