Fundamental
Overview
The USDJPY pair this
morning has been on a rollercoaster. Initially, we got a rally following the
soft Tokyo
CPI numbers and then Takaichi
winning the first round of votes in the Japanese election. Things turned
around quickly in the run-off as Ishiba
won triggering a selloff in the pair.
Takaichi was the one who
had been vocal in scrutinising the BoJ for hiking rates too fast. So, Ishiba
winning takes some of that pressure away. It’s not like the BoJ will now rush
to hike rates of course as macro developments will be the focus.
Next week is going to be a
big one for the pair as we get the ISM Manufacturing PMI and the US NFP report.
Positive data will likely see the pair drifting higher on rising Treasury yields,
while weak figures should keep the bearish momentum going.
USDJPY
Technical Analysis – Daily Timeframe
USDJPY Daily
On the daily chart, we can
see that USDJPY broke above the trendline recently but got smacked back down
following the election results. The sellers will likely start to pile in around
these levels to position for a break below the 140.00 handle, while the buyers
will want to see the price rallying back above the trendline to increase the
bullish momentum into the 150.00 handle.
USDJPY Technical
Analysis – 4 hour Timeframe
USDJPY 4 hour
On the 4 hour chart, we can
see that we have a strong support zone around the 143.00 handle where we can
find the confluence
of the upward trendline and the most recent higher low. This is where we can
expect the buyers to step in with a defined risk below the trendline to
position for a rally into new highs. The sellers, on the other hand, will want
to see the price breaking lower to increase the bearish bets into new lows.
USDJPY Technical
Analysis – 1 hour Timeframe
USDJPY 1 hour
On the 1 hour chart, we can
see more clearly the support zone around the 143.00 handle. The selloff looks to
be stalling already here as the dip-buyers are starting to pile in. The red
lines define the average daily range for today.
Upcoming
Catalysts
Today, we conclude the week with the US PCE report.