Fundamental
Overview
The US Dollar got a bit of
a boost yesterday as Fed Chair Powell reiterated that 50 bps of easing by year end
remains the base case. The market’s probability for the Fed to cut by 50 bps in
November fell from 51% to 40%.
Moreover, overnight the BoJ Summary of Opinions showed that the proponents for rate
hikes were more inclined to wait and monitor the developments in the overseas
economies and markets.
This week is a big one as
we get the US ISM Manufacturing PMI today and the US NFP report on Friday.
Positive data will likely see the pair drifting higher on rising Treasury
yields, while weak figures should keep the bearish momentum going.
USDJPY
Technical Analysis – Daily Timeframe
USDJPY Daily
On the daily chart, we can
see that USDJPY rallied back to the trendline and it’s now consolidating as we
await the key US data. The buyers will likely pile in around these levels to
position for a rally into the 150.00 handle, while the sellers will want to see
the price falling back below the trendline to keep pushing towards new lows.
USDJPY Technical
Analysis – 4 hour Timeframe
USDJPY 4 hour
On the 4 hour chart, we can
see that we have a resistance
zone around the 145.50 level where the price got rejected from several times in
the past weeks. This is where the sellers are stepping in with a defined risk
above the resistance to position for a drop into the 140.00 handle. The buyers,
on the other hand, will want to see the price breaking higher to position for a
rally into the 150.00 handle.
USDJPY Technical
Analysis – 1 hour Timeframe
USDJPY 1 hour
On the 1 hour chart, we can
see more clearly the rejection from the resistance zone as the sellers are
trying to build some momentum to the downside. The US ISM Manufacturing PMI
today will be a key report as strong data will likely trigger a rally, while
weak figures should increase the bearish momentum. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we get the US ISM Manufacturing PMI and the US Job Openings data.
Tomorrow, we have the US ADP report. On Thursday, we get the latest US Jobless
Claims figures and the US ISM Services PMI. Finally, on Friday, we conclude the
week with the US NFP report.