USDJPY Technical Analysis – US Consumer Sentiment data in the spotlight
. Fundamental Overview . The USD has been marginally stronger in the past couple of days as despite a softer US CPI and US PPI reports, the components that feed into the Core PCE increased the Fed’...
FundamentalOverview
The USD has been marginallystronger in the past couple of days as despite a softer USCPI and USPPI reports, the components that feed into the Core PCE increased the Fed’spreferred price index. In fact, the Core PCE Y/Y is now projected at 2.7% vs.2.6% prior, while the M/M measure is seen at 0.3% vs. 0.3% prior.
On the JPY side, the datarecently started to come out on the softer side and Governor Ueda recentlydidn’t sound like someone who’s in a hurry to raise rates amid someuncertainty. The Japanese Yen in the past couple of weeks has been supportedacross the board more by the risk-off sentiment and falling Treasury yieldsrather than domestic fundamentals.
Today we got the news that Japanesefirms agreed to lower than demanded wagehikes. This didn’t change the market pricing of 31 bps of tightening byyear-end as traders await more data on the inflation front to increase theexpectations for another rate hike.
USDJPYTechnical Analysis – Daily Timeframe
On the daily chart, we cansee that USDJPY failed to sustain the break above the key 148.60 level on thefirst try but the buyers are now trying once again. From a risk managementperspective, the sellers will have a better risk to rewards setup around the trendline to position for a drop into the140.00 handle next. The buyers, on the other hand, will want to see the pricebreaking above the trendline to increase the bullish bets into new highs.
USDJPY TechnicalAnalysis – 4 hour Timeframe
On the 4 hour chart, there’snot much we can glean from this timeframe but the buyers will likely continueto pile in as long as the price stays above the 148.60 level targeting the trendline.The sellers, on the other hand, will want to see the price falling back belowthe key level to regain control and push the price into new lows.
USDJPY TechnicalAnalysis – 1 hour Timeframe
On the 1 hour chart, there’snot much else we can add here as the buyers will continue to pile in above the148.30 and 148.60 levels, while the sellers will look for a break lower toposition for a drop into the 140.00 handle next. The red lines define the average daily range for today.
UpcomingCatalysts
Today we conclude the week with theUniversity of Michigan Consumer Sentiment report.
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