USDJPY Technical Analysis – Fed “insider” Timiraos weakens the USD
. Fundamental Overview . Yesterday, around 1:00 PM ET, WSJ’s Timiraos published an article which seemed like suggesting that a 50 bps cut is still being discussed.
FundamentalOverview
Yesterday, around 1:00 PMET, WSJ’s Timiraos published an article which seemed like suggesting that a 50bps cut is still being discussed. The market responded by raising 50 bps cutprobabilities to around 43% from 13% before the news.
Nick Timiraos is considereda Fed “insider”, so the market is attentive to all of his pieces concerningpotential Fed decisions.
The probabilities for theFed to cut by 50 bps at the upcoming meeting stand now around 43% and a totalof 115 bps of easing by year-end. For the BoJ, the market sees a 100%probability of no change at the upcoming meeting and a total of 8 bps of easingby year-end.
USDJPYTechnical Analysis – Daily Timeframe
On the daily chart, we cansee that USDJPY is now near the key 140.20 level. This is where we can expectthe buyers to step in with a defined risk below the level to position for arally into the 150.00 handle. The sellers, on the other hand, will want to seethe price breaking lower to increase the bearish bets into the 137.00 handlenext.
USDJPY TechnicalAnalysis – 4 hour Timeframe
On the 4 hour chart, we cansee that we have a downward trendline defining the current bearishmomentum. If we get a pullback from the 140.20 level, the sellers will likelylean on the trendline with a defined risk above it to position for a breakbelow the 140.20 supportwith a better risk to reward setup. The buyers, on the other hand, will want tosee the price breaking higher to increase the bullish bets into the next majortrendline around the 145.00 handle.
USDJPY Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we cansee more clearly the WSJ’s article acting as a catalyst for the drop into thelows. There’s not much else we can glean from this timeframe as the buyers willlook to buy the dip around the 140.20 level and the sellers will target a breakbelow it. The red lines define the average daily range for today.
UpcomingCatalysts
Today we conclude the week with the University of Michigan Consumer Sentimentreport which is expected to print at 68.0 vs. 67.9 last month.
See the video below
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