USDJPY Technical Analysis | Forexlive

USD

• The Fed left interest rates unchanged as
  expected with basically no change to the statement. The Dot Plot still showed
  three rate cuts for 2024 and the economic projections were upgraded with growth
  and inflation higher and the unemployment rate lower.
• Fed Chair Powell
  maintained a neutral stance as he said that it was premature to react to the
  recent inflation data given possible bumps on the way to their 2% target.
• The US CPI and
  the US PPI beat
  expectations for the second consecutive month.
• The US Jobless Claims beat
  expectations across the board.
• The latest US Manufacturing
  PMI
  beat expectations while the Services PMI missed slightly. Both the measures
  remain in expansion though.
• The market expects the first rate cut in June.

JPY

• The BoJ finally exited the negative interest rates
  policy as expected
  raising interest rates by 10 bps bringing the rate to a target between
  0.00-0.10%. Moreover, the central bank scrapped the yield curve control and the
  ETF purchases, while maintaining QE in place as expected.
• The latest Unemployment Rate remained unchanged hovering around
  cycle lows.
• The Japanese PMIs improved further for both the
  Manufacturing and Services measures although the former remains in
  contractionary territory.
• The Japanese wage data beat expectations by a big margin.
• The Japanese CPI came in line with expectations.
• The market expects another rate hike
  from the BoJ this year although the timing remains uncertain.

USDJPY Technical Analysis –
Daily Timeframe

On the daily chart, we can see
that USDJPY is consolidating just beneath a crucial resistance level at
151.92. In fact, we can notice that the pair has formed a big ascending triangle and a
break above the resistance could trigger a strong move to the upside. We can
expect the sellers to step in around these levels with a defined risk above the
resistance to position for a drop all the way back to the bottom trendline of the
triangle. The buyers, on the other hand, will want to see the price breaking
higher to increase the bullish bets and target new highs.

USDJPY
Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price
recently broke out of the trendline that was defining the uptrend since the
146.50 level. We can also notice that we had a double top at the resistance
level, but the price will need to break below the neckline at 150.26 to confirm
it. This recent breakout should point to at least a pullback into the neckline,
but the consolidation skewed the picture, so this might end up being a fake
breakout. We need to zoom in to see some more details.

USDJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we have
a minor support zone around the 151.00 handle. The sellers will want to see the
price breaking this support to pile in with more conviction into the neckline
targeting a break below it. The buyers, on the other hand, will likely continue
to step in around these levels and increase the bullish bets as soon as we get
a break above the resistance.

Upcoming Events

Today we have the US Durable Goods Orders and the US
Consumer Confidence report. Tomorrow, we have Fed’s Waller speaking. On
Thursday, we get the latest US Jobless Claims figures, while on Friday we
conclude with the Tokyo CPI, the US PCE and Fed Chair Powell.

See the video below