Fundamental
Overview
The Yen lost some more ground
last Thursday as the US
Jobless Claims figures came out better than expected. That helped ease the fears
around the US labour market triggered by the weak NFP report and improved the
risk sentiment.
The market has been slowly
paring back the aggressive rate cuts expectations for the Fed as now a 25 bps
cut in September is seen as more likely with a total of 98 bps of easing by
year-end. On the BoJ side, the market isn’t pricing any more rate hikes for
this year as there are just 9 bps of tightening expected by year-end.
USDJPY
Technical Analysis – Daily Timeframe
USDJPY Daily
On the daily chart, we can
see that USDJPY bounced around the 142.00 handle and pulled back to the 148.00
handle near the broken trendline. The price is consolidating just beneath
the 148.00 handle as the market awaits some more data before pushing with more
conviction into either direction.
USDJPY Technical
Analysis – 4 hour Timeframe
USDJPY 4 hour
On the 4 hour chart, we can
see that from a risk management perspective, the sellers will have a better
risk to reward setup around the 150.00 handle where they will find the confluence
of the major trendline and the 61.8% Fibonacci
retracement level. The buyers, on the other hand, will want to see the
price breaking higher to increase the bullish bets into new highs.
USDJPY Technical
Analysis – 1 hour Timeframe
USDJPY 1 hour
On the 1 hour chart, we can
see more clearly the consolidation between the 146.00 support
and the 148.00 resistance. The buyers will want to see the price breaking higher
to pile in for a rally into the 150.00 handle, while the sellers will look for
a break lower to position for a drop into the 140.00 handle. The red lines
define the average daily range for today.
Upcoming
Catalysts
Tomorrow we get the US PPI data. On Wednesday, we have the US CPI report. On
Thursday, we get the US Retail Sales and Jobless Claims figures. Finally, on
Friday, we conclude the week with the University of Michigan Consumer Sentiment
survey.
