FundamentalOverview

The US dollar remains underpressure as we got a few bearish catalysts this week. The first one came from Fed’s Bowman who delivered dovish comments andeven suggested that she would support a rate cut in July if inflationarypressures were to remain muted. Since she’s been a hawkish member, the marketreacted strongly to such a development.

The second catalyst came laterin the same day as Iran delivered a symbolicretaliation muchlike the one witnessed in 2020 with Suleimani. The market then expected the endof the conflict which was validated soon after by Trump’s post on his socialmedia platform.

Finally, yesterday we gotTrump lamenting again about the delay in rate cuts and WSJreported that the President was considering speeding up the announcement ofa new Fed Chair for next year. Month-end flows might also be responsible fordollar weakness.

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.

USDJPYTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that USDJPY continues to roll over towards the bottom of the recent rangearound the 142.35 level. That’s where we can expect the buyers to step in witha defined risk below the level to position for another rally into the 148.28 resistance.The sellers, on the other hand, will want to see the price breaking lower toincrease the bearish bets into the 140.00 handle next.

USDJPY TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that as the price broke below the 146.28 level, the sellers piled in moreaggressively to target the 144.25 zone. The price is now breaking further below the 144.25 zone which should see the sellers increasing their bearish bets into the 142.35 support. If the price rises back above the zone, we can expect the buyers to step in to position for a rally back into the 146.28 level next.

USDJPY TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee we now have a downward trendline defining the bearish momentum on thistimeframe. If the price pulls back into the trendline,we can expect the sellers to lean on it with a defined risk above it toposition for a break below the 144.25 zone with a better risk to reward setup.The buyers, on the other hand, will look for a break higher to increase the bullishbets into new highs. The red lines define the average daily range for today.

UpcomingCatalysts

Today, we get the latest US Jobless Claims figures and theFinal US Q1 GDP report. Tomorrow, we conclude the week with the Tokyo CPI, theUS PCE price index and the Final University of Michigan Consumer Sentimentreport.