USDJPY Technical Analysis – We continue to range as US CPI looms

Fundamental Overview

The USD erased the gains from the better than expected NFP report where hot wage growth figures triggered a slightly more hawkish repricing in interest rates expectations and sent Treasury yields higher.

That wasn’t enough to lift the greenback though and traders will now look forward to the next key events including the US-China trade talks, the US CPI and the FOMC decision. The US Dollar will need hawkish stuff to get a boost.

On the JPY side, the currency remains weak almost across the board as the BoJ is said to reduce its bond buying tapering plan. Other than that, the fundamentals have been pretty stale as the central bank continues to wait for US-Japan trade deal and the evolution of inflation.

USDJPY Technical Analysis – Daily Timeframe

On the daily chart, we can see that USDJPY is consolidating between the 142.35 and 146.00 levels. We’ve been ranging for quite some time as the market continues to wait for stronger signals to pick a direction. For now, the target for the buyers remains the 148.32 resistance, while the sellers will look for a break below the 142.35 support to extend the drop into the 140.00 handle next.

USDJPY Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a support zone around the 144.32 level. This is where we can expect the buyers to step in with a defined risk below the support to position for a rally into the 146.28 level. 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, there’s not much else we can add here as the buyers will look for a bounce around the support, while the sellers will look for a break. The red lines define the average daily range for today.

Upcoming Catalysts

Today, we have the US-China trade talks in London. On Wednesday, we have the US CPI. On Thursday, we get the latest US Jobless Claims figures and US PPI. On Friday, we conclude the week with the University of Michigan Consumer Sentiment report.