FundamentalOverview

The USD continues to besupported amid the ongoing de-escalation in trade wars. This has most likely todo more with positioning rather than fundamentals. The short dollar trade gotvery overstretched so positive news on the tariffs front is providing a pullback.In the medium term, the US Dollar should keep on depreciating as the path ofleast resistance for the Fed remains to cut rates.

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 and as the sentiment improves, the Yen weakens. On the monetarypolicy front, the negative impact on the Japanese economy from tariffsuncertainty and the downward pressure on inflation from the surging yen willkeep the BoJ on the sidelines for the time being.

USDJPYTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that USDJPY bounced from the key 140.00 handle and pulled all the way backto the 144.00 level. From a risk management perspective, the sellers will havea better risk to reward setup 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 the price broke above the downward trendline which is a good signalfor the buyers, but it’s now testing the key 144.00 resistance. The sellers will likely pile inaround these levels with a defined risk above the resistance to position for adrop back into the 140.00 handle. The buyers, on the other hand, will want tosee the price breaking higher to increase the bullish bets into the majortrendline.

USDJPY TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee that we have a minor upward trendline defining the bullish momentum on thistimeframe. The buyers will likely continue to lean on the trendline to keeppushing into new highs, while the sellers will look for a break lower toincrease the bearish bets into new lows. The red lines define the average daily range for today.

UpcomingCatalysts

Tomorrow we have the US Job Openings data andthe US Consumer Confidence report. On Wednesday, we have the US ADP, the US Q1GDP and the US Employment Cost Index. On Thursday, we have the BoJ PolicyDecision, the US Jobless Claims, the US PCE and the US ISM Manufacturing PMI. On Friday, weconclude the week with the US NFP report. As a reminder, the market is focusedon tariff related news at the moment, so the data is not as market-moving as itused to be in the past months.

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