Basic overview
The USD got a boost recently from another set of hot data like the US Job Openings surprise on the upside and the index of the prices paid in the ISM PMI Services at its highest level since 2023.
Market prices did not change much however and Fed's Waller yesterday kept the hopes of rate cuts alive saying that the pace would be driven by the progress of inflation. As the central bank has turned its focus back to inflation, next week's US CPI report should have a bigger impact on interest rate expectations than tomorrow's US NFP (barring big moves ).
On the JPY side, the BoJ left interest rates unchanged as expected at the last policy meeting, but Governor Ueda delivered less pressure than expected.
In fact, it really impressed him salary data to decide on the timing of the next rate hike and said the move will become clearer in March or April. This caused the market to price in the probabilities for a walk in january and pushed back again to the next meeting scheduled for March.
Today, the salary data the matter of expectations although real wage growth is still slightly negative. That gave the JPY a bit of a boost but nothing bad as we will need more data before the March decision.
USDJPY Technical Analysis – Daily Timeframe
USDJPY Daily
On the daily chart, we can see that USDJPY is still consolidating around the recent highs even though the price has been checked above the 158.00 against. From a risk management perspective, buyers will have a better risk to reward position around the main line of motionwhile the sellers will look for a break below the trendline to extend the fall into the 149.00 handle next.
USDJPY Technical Analysis – 4 Hour Time Frame
USDJPY 4 hours
On the 4 hour chart, we can see more clearly the price action range with the price now trading above the resistance of 158.00. The buyers are likely to step in around this level with a marked risk below to set up for a rally into the 160.00 handle. The sellers, on the other hand, will want to see the price fall back below the 158.00 level to target the 156.00 support next.
USDJPY Technical Analysis – 1 hour timeframe
USDJPY 1 hour
On the 1 hour chart, there is not much else we can add here as the buyers will be looking for a bounce and rally into the 160.00 area, while the sellers will be looking for a failure. of the break and run to the 156.00 support. The red lines define the average daily range for today.
Catalysts to come
Tomorrowwe finish the week with the US NFP report.
