Fundamental
Overview
The US
CPI yesterday came in line with expectations leading to a bit of a “sell
the fact” reaction in the US Dollar.
The bullish momentum picked
up a bit later though as Fed’s Logan delivered a hawkish comment
saying that “models show that Fed funds could be very close to neutral” basically
implying a lot more cautious approach on rate cuts in 2025.
The market is viewing all
of this in light of the recent US election as Trump’s policies are likely to spur
growth and potentially keep inflation above target for longer, making the Fed’s
job of bringing inflation back to target a bit harder.
USDJPY
Technical Analysis – Daily Timeframe
USDJPY Daily
On the daily chart, we can
see that USDJPY finally extended the rally into new highs helped by a hawkish
comment from Fed’s Logan. There’s no strong technical resistance now at least until the 160.00
handle.
If we get a pullback, the
buyers will likely lean on the trendline 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 breaking lower to start targeting a drop back into the
152.00 support.
USDJPY Technical
Analysis – 4 hour Timeframe
USDJPY 4 hour
On the 4 hour chart, we can
see that we have a minor upward trendline defining the current bullish
momentum. If we get a pullback, the buyers will likely lean on it to position
for new highs, while the sellers will look for a break lower to target a break
below the major trendline.
USDJPY Technical
Analysis – 1 hour Timeframe
USDJPY 1 hour
On the 1 hour chart, there’s
not much else we can add as from a risk management perspective, the buyers will
have a better setup around the trendline, while the sellers are better to wait
for a technical break lower instead of trying to catch the top. The red lines
define the average daily range for today.
Upcoming
Catalysts
Today we have the US PPI and the US Jobless Claims figures. Tomorrow, we
conclude the week with the US Retail Sales data.