Fundamental
Overview
Overall, we’ve seen a
rangebound price action in the US Dollar this week as the market awaits new
catalysts to push into either direction. The market’s pricing remains mostly unchanged
at three rate cuts by the end of 2025 for the Fed.
Yesterday, we saw some strong
bids in the greenback late in the day although there wasn’t any catalyst for
the move. Those moves are getting erased this morning and we’ll see if that’s
going to continue.
On the JPY side, the Japanese
CPI today came mostly in line with expectations with inflation being just a
bit above the BoJ’s 2% target. The market is pricing a 58% chance of a rate
hike in December and a total of 48 bps of tightening by the end of 2025.
USDJPY
Technical Analysis – Daily Timeframe
USDJPY Daily
On the daily chart, we can
see that USDJPY has been mostly rangebound around the 155.00 handle this week.
From a risk management perspective, the buyers will have a better risk to
reward setup around the 152.00 support to position for a rally into the 160.00 handle
next. The sellers, on the other hand, will want to see the price breaking below
the support to start targeting new lows.
USDJPY Technical
Analysis – 4 hour Timeframe
USDJPY 4 hour
On the 4 hour chart, we can
see that we have an upward trendline
where the price got rejected from several times in the past weeks. The buyers
will likely continue to lean on it to position for new highs, while the sellers
will look for a break lower to position for the break below the key support.
USDJPY Technical
Analysis – 1 hour Timeframe
USDJPY 1 hour
On the 1 hour chart, we can
see that the price yesterday broke above a minor downward trendline that was
defining the pullback into the major trendline. This might be a signal for new
highs ahead but given the rangebound price action, it could also be a false
signal. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we conclude the week with the US PMIs.