USDJPY Technical Analysis – The constructive NFP report wasn’t sufficient for the USD

Fundamental
Overview

The USD got a boost
yesterday as the US
NFP report came out better than expected and triggered a hawkish repricing
in interest rates expectations. Unfortunately for the greenback, that wasn’t
enough as wage growth came out on the softer side which limited further
repricing. As the market got quickly back to price just two rate cuts by
year-end, the US dollar lost support and eventually gave back most of the gains.

On the JPY side, nothing
has changed fundamentally, and the currency has been mainly driven by the risk
sentiment. As a reminder, the BoJ kept interest rates unchanged at 0.5% and
reduced the bond tapering plan for fiscal year 2026 as expected at the last
meeting. The BoJ continues to place a great deal on the US-Japan trade deal and
the evolution of inflation before looking at adjusting rates.

USDJPY
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDJPY continues to trade in a range between the 142.35 support and
the 146.00 resistance. There’s not much we can glean from
this timeframe, so we need to zoom in to see some more details.

USDJPY Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price broke above the key 144.25 zone yesterday following the
positive NFP report and it’s now retesting the area. This is where we can
expect the buyers to step in with a defined risk below the zone to position for
further upside into the 146.28 resistance. The sellers, on the other hand, will
look for a break lower to pile in for a drop back into the 142.35 support.

USDJPY Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a minor upward trendline
defining the bullish momentum on this timeframe. The buyers will likely
continue to lean on the trendline to keep pushing into new highs, while the
sellers will look for a break lower to increase the bearish bets into the
142.35 level next. The red lines define the average daily range for today.

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