Fundamental
Overview
The USD got a boost recently
from another set of hot data as the US Job Openings surprised to the upside and the
prices paid index in the ISM Services PMI jumped to the highest level since
2023.
The market’s pricing didn’t
change much though and Fed’s Waller yesterday kept the rate cuts hopes alive
saying that the pace will be driven by inflation progress. Since the central
bank has switched its focus back to inflation, the US CPI report next week should
have a bigger influence on interest rates expectations than the US NFP tomorrow
(barring big deviations).
On the JPY side, the BoJ
left interest rates unchanged as expected at the last policy meeting, but
Governor Ueda delivered a less hawkish than expected presser.
In fact, he placed a great
deal on wage data to decide on the timing of the next
rate hike and added that the trend will become clearer in March or April. This
made the market to price out the probabilities for a hike in January and push back once again to the
next meeting which is scheduled for March.
Today, the wage
data beat expectations although real wage growth remains slightly negative.
That gave the JPY a little boost but nothing serious as we will need more data
ahead of 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 probed above the 158.00 resistance.
From a risk management perspective, the buyers will have a better risk to
reward setup around the major trendline, while the sellers will look for a
break below the trendline to extend the drop into the 149.00 handle next.
USDJPY Technical
Analysis – 4 hour Timeframe
USDJPY 4 hour
On the 4 hour chart, we can
see more clearly the rangebound price action with the price now trading above
the 158.00 resistance. The buyers will likely step in around this level with a
defined risk below it to position for a rally into the 160.00 handle. The
sellers, on the other hand, will want to see the price falling 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’s
not much else we can add here as the buyers will look for a bounce and a rally
into the 160.00 handle, while the sellers will look for a failure of the
breakout and a run to the 156.00 support. The red lines define the average daily range for today.
Upcoming
Catalysts
Tomorrow, we conclude the week with the US NFP report.