US:

• The Fed hiked by 25 bps as
  expected and kept everything unchanged at the last meeting.
• Fed Chair Powell reaffirmed their data dependency
  and kept all the options on the table.
• The US CPI this
  week came in line with expectations, so the market’s pricing remained roughly
  the same.
• The labour market
  displayed signs of softening although it remains fairly solid.
• Last week the ISM Services PMI and Jobless Claims
  surprised to the upside, which point to a resilient economy overall.
• Yesterday, we got yet another beat in Jobless Claims followed
  by strong Retail Sales and PPI data.
• The Fed members are leaning more towards a pause in
  September and the next decision will still be dictated by the economic data.
• The market doesn’t expect the Fed to hike at the
  September meeting and there’s just a 33% chance of a hike in November, although
  that can change if the data keeps on running hot.

Japan:

• The BoJ kept everything unchanged as expected at the last meeting but
  tweaked the YCC policy keeping the target band unchanged but giving more
  flexibility with a hard cap at 1.00%.
• The Japanese CPI data surprised to the upside
  recently with the core-core reading reaching again the previous high.
• The Unemployment Rate surprisingly jumped to 2.7%
  recently, although it remains near cycle lows.
• BoJ Governor Ueda over the weekend said that his
  focus is on a quiet exit from the monetary easing and added that the BoJ should
  have enough data by year end to decide how to proceed.
• The Japanese wage data last week showed a slowing in wage
  growth, and this is something the BoJ focuses on particularly.

USDJPY Technical Analysis –
Daily Timeframe

On the daily chart, we can see
that USDJPY remains in an uptrend, but the momentum is waning as we approach
the 150.00 handle. The big picture fundamentals are not as strong as they were
in the past year as we have the BoJ that might exit NIRP in the next 12 months
and the Fed expected to end its tightening cycle. Nonetheless, the data is not
supporting USDJPY downside yet as the US economy remains resilient and the wage
growth in Japan is slowing.

USDJPY Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the fall
caused by the BoJ Governor Ueda’s comments over the weekend has been completely
erased and the pair is now eyeing a breakout to the upside. In fact, the levels
to watch now are the resistance at
147.81 and the upward trendline. A break
above the resistance should lead to a rally into the 150.00 handle, while a
break below the trendline is likely to cause a bigger pullback into the 145.00
support.

USDJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price recently pulled back from the resistance into the 147.00 support. The
buyers stepped in as the US data surprised to the upside with the pair now
approaching the resistance again. We should see more buyers coming into the
market if the price breaks above the resistance to target the 150.00 handle.
The sellers, on the other hand, will want to see the price breaking below the
147.00 support and the trendline to pile in and target the 145.00 support.

Upcoming Events

Today the only notable
report left to be released for this week is the University of Michigan Consumer
sentiment survey. Consumer sentiment might have deteriorated given higher
energy prices and that might have filtered to higher inflation expectations. A
very weak report is likely to weigh on Treasury yields and lead to some
downside in USDJPY, while a hot report, especially on the inflation
expectations side, might cause another rally in the pair.

See also the video below

MoneyMaker FX EA Trading Robot