USDJPY Technical Analysis – We got stuck in a range

Fundamental
Overview

The USD opened higher today
and continued to dominate throughout the Asian session as we got once again some
tariffs headlines that weighed on the risk sentiment. In fact, late yesterday
Trump announced that he will impose 25% tariffs and sanctions on Colombia
because they
refused to take the deported migrants.

Colombia retaliated
soon after by imposing 25% tariffs on US imports. Late in the Asian session
though, we got the news that the US will hold the tariffs and sanctions in
reserve as Colombia accepted the illegal migrants returned from the US. That
might see the US Dollar getting weaker again.

On the JPY side, the BoJ hiked
interest rates by 25 bps as widely expected last week but didn’t offer much
in terms of forward guidance which capped the JPY gains as the market already
expected a hike and then another some time in the second half of this year.

USDJPY
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDJPY has been consolidating for couple of weeks with the price now
being very close to the major trendline. The buyers will likely step in
around the trendline with a defined risk below it to position for a rally into
the 160.00 handle. The sellers, on the other hand, will want to see the price
breaking lower to increase the bearish bets into the 149.00 handle next.

USDJPY Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the rangebound price action between the 154.80 support
and the 156.60 resistance. The market participants will keep on playing the
range buy buying at support and selling at resistance until we get a breakout
on either side.

USDJPY Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much we can add here as the buyers will look for a bounce around the
support or a break above the resistance, while the sellers will look for a rejection
around the resistance or a break below the support. The red lines define the average daily range for today.

Upcoming
Catalysts

Tomorrow we get the US Consumer Confidence data. On Wednesday,
we have the FOMC Policy Decision. On Thursday, we get the US Q4 GDP report and
the latest US Jobless Claims figures. On Friday, we conclude the week with the
US PCE and the US Employment Cost Index.

Watch the video below

This article was written by Giuseppe Dellamotta at www.forexlive.com.