Fundamental Overview
The USD continues to be supported amid the ongoing de-escalation in trade wars. This has most likely to do with positioning rather than fundamentals. The short dollar trade got very 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 of least resistance for the Fed remains to cut rates.
On the JPY side, the currency has been driven mainly by global events rather than domestic fundamentals. Alongside the Swiss Franc, it’s been the favoured safe haven in the currencies space amid the swings in risk sentiment. On the monetary policy front, the BoJ kept interest rates unchanged as expected and delivered a dovish message.
This was then echoed by BoJ Governor Ueda which placed a great deal on trade war developments. In summary, the central bank is likely to go faster on rate hikes in case we get a good trade deal and delay rate adjustments in case the trade deal disappoints.
USDJPY Technical Analysis – Daily Timeframe
On the daily chart, we can see that USDJPY continues to pull back from the key 140.00 handle. From a risk management perspective, the sellers will have a better risk to reward setup around the major trendline to position for further downside, while the buyers will look for a break higher to increase the bullish bets into the 151.00 handle next.
USDJPY Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have an upward minor trendline defining the bullish momentum. If we get a pullback, the buyers will likely lean on the trendline to position for a rally into the major trendline, while the sellers will look for a break lower to increase the bearish bets into the 140.00 handle next.
USDJPY Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much else we can add here as chasing the rally at these levels doesn’t look good. We have also the US NFP report today which could provide a pullback in case the data is weaker than expected. The red lines define the average daily range for today.
Upcoming Catalysts
Today, we conclude the week with the US NFP report but watch out for tariff related news as that’s what really matters for the market now.
This article was written by Giuseppe Dellamotta at www.forexlive.com. Read More Details
Finally We wish PressBee provided you with enough information of ( USDJPY Technical Analysis – Dollar shorts unwind as de-escalation gathers steam )
Also on site :
- Max Verstappen and Kelly Piquet announce birth of baby ahead of Miami GP: Name revealed
- Drones hit ‘Freedom Flotilla’ Gaza aid ship in international waters
- ‘Russophobia’ behind Romania’s expulsion of RT reporter – Tara Reade (VIDEO)