USDJPY Technical Analysis – Focus on the "Liberation Day"

Fundamental Overview

The USD got a bit of a boost on Monday following the better than expected US PMIs although the gains were not widespread. We’ve also seen some bids in the greenback yesterday following the weak US Consumer Confidence where inflation expectations jumped to yet another high.

Overall, the market is still pricing between two to three rate cuts this year and the sentiment remains tentative as we approach the Trump’s “Liberation Day” on April 2^nd.

On the JPY side, we haven’t seen much change in the domestic fundamentals with governor Ueda today repeating the same old comments. The market is still pricing around 36 bps of tightening by year-end with particular focus on inflation data and the unveiling of the US tariffs plan next Wednesday.

USDJPY Technical Analysis – Daily Timeframe

On the daily chart, we can see that USDJPY broke above the major trendline this week. This is where we can expect the buyers to pile in to position for a rally into the 160.00 handle next. The sellers, on the other hand, will want to see the price falling back below the trendline to invalidate the bullish setup and start targeting new lows.

USDJPY Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have an upward trendline now defining the bullish momentum on this timeframe. From a risk management perspective, the buyers will have a better risk to reward setup around the trendline. The sellers, on the other hand, will look for a break below the trendline to regain control and pile in for a drop 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 there’s no clear level where buyers or sellers can lean onto except the trendline around the 149.50 level. The red lines define the average daily range for today.

Upcoming Catalysts

Tomorrow we get the latest US Jobless Claims figures, while on Friday we conclude the week with the Tokyo CPI and the US PCE report.

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