USDJPY Technical Analysis – The market is waiting for fresh catalysts
Fundamental Overview . . . The Fed yesterday delivered on expectations by holding rates steady and keeping the dot plot on two rate cuts for 2025.
FundamentalOverview
The Fed yesterday deliveredon expectations by holding rates steady and keeping the dot plot on two ratecuts for 2025. Fed Chair Powell didn’t offer anything in terms of forwardguidance as the uncertainty continues to favour a wait-and-see approach. The USDstrengthened a bit following the announcement, but it had more to do with noiserather than signal. The Fed decision was overall a non-event.
The market continues to pricein two rate cuts in 2025, but the path of least resistance favours more ratecuts. Therefore, the greenback will need stronger data to trigger a morehawkish repricing and get a boost.
On the JPY side, the BoJkept interest rates unchanged at 0.5% and reduced the bond tapering plan forfiscal year 2026 as expected. That was also a non-event which was alsoreflected in the market with light changes in the exchange rate. We are in avery low volatility period as we continue to wait for fresh macro developmentsand key catalysts that could change the current expectations.
USDJPYTechnical Analysis – Daily Timeframe
On the daily chart, we cansee that USDJPY continues to range between the 142.35 and 146.00 level. The priceis now approaching the 146.00 handle where we should either get anotherrejection into the support or a breakout. We need to zoom in to see some moredetails.
USDJPY TechnicalAnalysis – 4 hour Timeframe
On the 4 hour chart, we cansee that the price yesterday bounced on the 144.30 zone which has been actingas kind of a barometer for the near-term momentum. The buyers stepped in toposition for a rally into the 146.28 level next. The sellers might want to waitfor the price to come into the resistance to position for a drop back into thesupport with a better risk to reward setup.
USDJPY TechnicalAnalysis – 1 hour Timeframe
On the 1 hour chart, we cansee that the price is now trading right in the middle of the two key levels.There’s not much to do here other than waiting for the price to come intoeither of those levels to get better risk to reward setups. The red linesdefine the average daily range for today.
UpcomingCatalysts
Tomorrow, we conclude the week with the Japanese CPI.
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