Fundamental
Overview
The USD performance has
been mixed this week amid general uncertainty ahead of the April 2 tariffs plan
announcement. The greenback got a bit of a boost recently as Trump announced
25% tariffs on auto imports on Wednesday but those gains eventually waned.
Overall, the market is still pricing between two to three rate cuts this year
and the sentiment remains tentative ahead of the Trump’s “Liberation Day”.
On the JPY side, we got higher
than expected Tokyo CPI figures today which gave the Yen a boost as traders
continue to focus on the inflation data to decide whether the BoJ could hike
more than twice by the end of the year. Overall, the market is still pricing
around 34 bps of tightening by year-end with particular focus now on the
unveiling of the US tariffs plan next Wednesday.
USDJPY
Technical Analysis – Daily Timeframe
USDJPY Daily
On the daily chart, we can
see that after breaking above the major trendline, the pair continued to drift higher.
There’s not much else we can glean from this timeframe so we need to zoom in to
see some more details.
USDJPY Technical
Analysis – 4 hour Timeframe
USDJPY 4 hour
On the 4 hour chart, we can
see that we have an upward trendline 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 to position for further upside. 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
USDJPY 1 hour
On the 1 hour chart, we can
see that we have a minor upward trendline. On an intraday basis, we can expect
the buyers to lean on the trendline with a defined risk below it to position
for a rally into new highs, while the sellers will look for a break lower to pile
in for a drop into the major trendline next. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we conclude the week with the US PCE
report and the final University of Michigan survey where long term inflation
expectations will be in focus.