USDJPY Technical Analysis – Will the Fed push back against the dovish pricing?
. Fundamental Overview . The USD came under pressure again this week as some disappointing headlines on the tariffs front hit the sentiment.
FundamentalOverview
The USD came under pressureagain this week as some disappointing headlines on the tariffs front hit thesentiment. The de-escalation continues though and tonight we got the news thatthe US and Chinese representatives will meet in Switzerland in the coming daysto start engaging in discussions.
Today, we also have theFOMC policy decision where the Fed is expected to keep interest rates unchangedand could push back against the dovish market pricing giving the greenback a boostin the short term.
On the JPY side, thecurrency has been driven mainly by global events rather than domesticfundamentals. Alongside the Swiss Franc, it’s been the favoured safe haven inthe currencies space amid the swings in risk sentiment. On the monetary policyfront, the BoJ kept interest rates unchanged as expected anddelivered a dovish message.
This was then echoed by BoJGovernor Ueda which placed a great deal on trade developments. In summary, thecentral bank is likely to go faster on rate hikes in case we get a good tradedeal and delay rate adjustments in case the trade deal disappoints.
USDJPYTechnical Analysis – Daily Timeframe
On the daily chart, we cansee that USDJPY erased most of last week’s gains in the past couple of days andthreatens to extend the bearish move into the 140.00 handle. From a riskmanagement perspective though, the sellers will have a better risk to rewardsetup around the major trendline to position for furtherdownside, while the buyers will look for a break higher to increase the bullishbets into the 151.00 handle next.
USDJPY TechnicalAnalysis – 4 hour Timeframe
On the 4 hour chart, we cansee that we broke below the strong support zone around the 144.00 handle where we hadalso the upward minor trendline for confluence. The sellers piled in with moreconviction on the break to target the 142.00 handle next. The buyers, on theother hand, will likely step in around the 142.00 handle to position for arally back into new highs.
USDJPY TechnicalAnalysis – 1 hour Timeframe
On the 1 hour chart, we cansee that we have a minor downward trendline defining the bearish momentum onthis timeframe. The sellers will likely continue to lean on the trendline tokeep pushing into new lows, while the buyers will look for a break higher to pilein for a rally into the major trendline. The red lines define the average daily range for today.
UpcomingCatalysts
Today, we have the FOMC Rate Decision. Tomorrow, we get thelatest US Jobless Claims figures. On Friday, we conclude the week with theJapanese wage data.
Watch the video below
Disclaimer: The views in this article are from the original Creator and do not represent the views or position of Hawk Insight. The content of the article is for reference, communication and learning only, and does not constitute investment advice. If it involves copyright issues, please contact us for deletion.
