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.
• 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 yesterday missed expectations slightly
  although Continuing Claims improved.
• 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 Consumer Confidence missed expectations although the labour
  market details improved.
• The market still expects the first cut in June, but
  the probability stands at just 60%.

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 continues to consolidate 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 risk
of an intervention put a lid on further gains. We got some risk off flows
yesterday late in the day following the news of a possible Israel-Iran conflict
that triggered a selloff into the 151.00 support where the price eventually
bounced from as the buyers stepped in to fade the move and position for a break
above the cycle high with a better risk to reward setup.

USDJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with the break below the 151.50 zone that
triggered a selloff into the 151.00 support. The buyers should keep piling in
around the support to position for a rally back into the resistance targeting a
breakout. The sellers, on the other hand, will want to see the price breaking
lower to increase the bearish bets into the new lows.

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