FundamentalOverview

The main theme in the lastcouple of weeks has been the selling of US assets. Stock, bonds and the US Dollarhave been under strong selling pressure in what looks like a general deleveragingfrom US assets in favour of safe havens like gold, which has been printing newall-time highs almost every day.

On the JPY side, thecurrency has been driven mainly by global events rather than domesticfundamentals. The negative impact on the economy from tariffs uncertainty andthe downward pressure on inflation from the surging yen and lower commodityprices, will keep the BoJ on the sidelines for the time being.

USDJPYTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that USDJPY finally reached the key 140.00 handle. This is where we canexpect the buyers to step in with a defined risk below the level to positionfor a correction into the major trendline.The sellers, on the other hand, will want to see the price continuing lower toincrease the bearish bets into the 137.00 handle next.

USDJPY TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that once the 142.00 supportgave way, the sellers piled in more aggressively and pushed the pair into the140.00 handle. From a risk management perspective, the sellers will have abetter risk to reward setup around the minor downward trendline to position forfurther downside. The buyers, on the other hand, will want to see the pricebreaking above the trendline to start targeting the next major trendline aroundthe 147.00 handle.

USDJPY Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we cansee that the pair briefly probed below the 140.00 handle but chasing the movelower at these levels looks bad from a risk to reward perspective. We can seethat we have a minor downward trendline defining the momentum on this timeframe.The sellers will likely lean on the trendline to position for a drop below the140.00 handle, while the buyers will look for a break higher to target a moveinto the 142.00 resistance. The red lines define the average daily range for today.

UpcomingCatalysts

Tomorrow we have the Japanese and US FlashPMIs. On Thursday, we get the latest US Jobless Claims figures, while onFriday, we conclude the week with the Tokyo CPI.

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