FundamentalOverview

The USD got a boostyesterday as the USNFP report came out better than expected and triggered a hawkish repricingin interest rates expectations. Unfortunately for the greenback, that wasn’tenough as wage growth came out on the softer side which limited furtherrepricing. As the market got quickly back to price just two rate cuts byyear-end, the US dollar lost support and eventually gave back most of the gains.

On the JPY side, nothinghas changed fundamentally, and the currency has been mainly driven by the risksentiment. As a reminder, the BoJ kept interest rates unchanged at 0.5% andreduced the bond tapering plan for fiscal year 2026 as expected at the lastmeeting. The BoJ continues to place a great deal on the US-Japan trade deal andthe evolution of inflation before looking at adjusting rates.

USDJPYTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that USDJPY continues to trade in a range between the 142.35 support andthe 146.00 resistance. There’s not much we can glean fromthis timeframe, so we need to zoom in to see some more details.

USDJPY TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that the price broke above the key 144.25 zone yesterday following thepositive NFP report and it’s now retesting the area. This is where we canexpect the buyers to step in with a defined risk below the zone to position forfurther upside into the 146.28 resistance. The sellers, on the other hand, willlook for a break lower to pile in for a drop back into the 142.35 support.

USDJPY TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee that we have a minor upward trendlinedefining the bullish momentum on this timeframe. The buyers will likelycontinue to lean on the trendline to keep pushing into new highs, while thesellers will look for a break lower to increase the bearish bets into the142.35 level next. The red lines define the average daily range for today.

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