FundamentalOverview

The USD got under somerenewed pressure this week following some soft US data. In fact, we got lowerthan expected US CPIand PPIdata coupled with some weak joblessclaims figures. This led to a more dovish repricing in interest ratesexpectations and a drop in Treasury yields.

On the JPY side, thecurrency remains weak almost across the board as the BoJ is said to reduce its bond buying tapering plan and we continue to hear fromofficials that a change in rates is not going to happen anytime soon. Thecentral bank continues to wait for US-Japan trade deal and the evolution ofinflation.

USDJPYTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that USDJPY is pulling back towards the 142.35 support following some soft US economicdata. If the price gets there, we can expect the buyers to step in with adefined risk below the support to position for a rally into the 148.28 levelnext. The sellers, on the other hand, will look for a break lower to extend thedrop into the 140.00 handle.

USDJPY TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that we’ve been ranging for quite some time here. The price is tradingright in the middle of two key levels. From a risk management perspective,there’s nothing to do here other than waiting for the price to reach one of thetwo key levels.

USDJPY TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee more clearly the recent price action with the break below the 144.35 levelleading to increased bearish momentum as the sellers piled in for a move intothe 142.35 level next.

If the price retests the144.35 level, we can expect the sellers to step in with a defined risk abovethe level to position for the drop into the 142.35 level. The buyers, on theother hand, will look for a break higher to start targeting the 146.28 levelnext. The red lines define the average daily range for today.

UpcomingCatalysts

Today, we conclude the week with the University of MichiganConsumer Sentiment report.

Watch the video below