USDJPY Technical Analysis – The greenback lacks positive drivers
Fundamental Overview . . . The bearish momentum triggered by the dovish Fed’s Bowman comments and the end of Israel-Iran conflict last Monday remains intact as we haven’t got any other meaningful...
FundamentalOverview
The bearish momentumtriggered by the dovish Fed’s Bowman comments and the end ofIsrael-Iran conflict last Monday remains intact as we haven’t got any othermeaningful catalyst ever since. The market is now leaning more dovishly on theFed with the pricing showing 65 bps of easing expected by year-end.
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 correct towards the bottom of the range around the142.35 level. That’s where we can expect the buyers to step in with a definedrisk 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 to increase the bearish bets into the140.00 handle next.
USDJPY TechnicalAnalysis – 4 hour Timeframe
On the 4 hour chart, we cansee that we had a bit of a consolidation around the key 144.25 zone. As theprice broke below the zone, the sellers started to pile in more aggressively toextend the drop into the 142.35 support. The buyers will need the price to riseback above the zone to start targeting the 146.28 level next.
USDJPY TechnicalAnalysis – 1 hour Timeframe
On the 1 hour chart, there’snot much else we can add here as we might continue to consolidate around theselevels. The sellers will keep on looking for shorts below the 144.25 zone,while the buyers will look for longs above that area. The red lines define the average daily range for today.
UpcomingCatalysts
Tomorrow, we have the US ISM Manufacturing PMI and the US JobOpenings. On Wednesday, we get the US ADP data. On Thursday, we conclude withthe US NFP, the US Jobless Claims and the US ISM Services PMI before the USholiday on Friday.
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