USDJPY Technical Analysis

The Fed has decided to pause at its latest policy
meeting keeping rates at 5.00-5.25% range. They explained that in doing so they
can see more economic data and make better decisions on how much to raise
interest rates to bring inflation down to their target without causing too much
damage to the economy. They have also raised their terminal rate projection
although the market doesn’t see it happening as recent economic data started to
disappoint, especially the labour market data. The on JPY side, the BoJ maintains its easy monetary policy and no
change is expected in the near future.

USDJPY Technical Analysis –
Daily Timeframe

On the daily chart, we can see that USDJPY has
reached a key resistance level at
142.17 where we can also find the 61.8% Fibonacci retracement level of
the entire fall from the October 2022 high. The price is a bit overstretched
from the blue 8 moving average so we
may expect a bit of a pullback before the next move. There’s also a divergence with the
MACD right at
this resistance which makes a pullback into the 138 support more likely.

USDJPY Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see the price is now
finding some support at the red 21 moving average and a previous swing high
level. The sellers should pile in here with a stop above the 61.8% Fibonacci
level and the trendline as first
target. In fact, we can see that at the 138 support we can also find the 50%
Fibonacci retracement level for confluence. From a
risk management perspective, that will be a good level for the buyers to enter
at with a defined risk below the trendline.

USDJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see the
support level where the price is reacting from. We can also notice a divergence
with the MACD, therefore if the price breaks below this support level, we can
expect a bigger selloff into the 138 level. For the price to break above the
142.17 resistance sustainably, we should get some very hawkish comments from
Fed speakers or the economic data have to surprise upwards.

This week
we will hear from many Fed members including Fed Chair Powell who’s going to
testify to Congress on the state of monetary policy on Wednesday and Thursday.
We conclude the week with the US Jobless Claims on Thursday and US PMIs on

This article was written by FL Contributors at Source