Fundamental
Overview
The USD gained ground
across the board last week amid risk-off flows and renewed tariffs fears. In
fact, we got some weak US data coupled with new cycle highs
in inflation expectations.
This is something to keep
in mind in light of the next NFP and CPI reports coming out before the March
FOMC decision where we will also get the updated SEP and Dot Plot. Moreover,
last Thursday, Trump repeated that tariffs on Mexico and Canada will go into
effect on March 4th as planned and that he will impose additional
10% tariffs on China.
On the JPY side, nothing
has changed fundamentally but the Japanese Yen has been supported across the
board by the risk-off sentiment and falling Treasury yields. Last Friday, the
JPY weakened as the Tokyo
CPI missed expectations and saw the market paring back the bets for a third
rate hike by the end of the year.
USDJPY
Technical Analysis – Daily Timeframe
USDJPY Daily
On the daily chart, we can
see that USDJPY eventually bounced from the 148.60 level and pulled back into
the 150.93 resistance.
This is where we can expect the sellers to step in with a defined risk above
the resistance to position for the break below the 148.60 level. The buyers, on
the other hand, will look for a break higher to extend the pullback into the trendline
where they will target a break above it.
USDJPY Technical
Analysis – 4 hour Timeframe
USDJPY 4 hour
On the 4 hour chart, we can
see more clearly the pullback into the resistance with some rangebound price
action now. There’s not much else we can add here as the sellers will likely
pile in for a drop back into the 148.60 level, while the buyers will look for a
break higher to extend the rally into the major trendline.
USDJPY Technical
Analysis – 1 hour Timeframe
USDJPY 1 hour
On the 1 hour chart, we can
see that we have a minor support zone around the 150.18 level where the price
got rejected from several times in the past days. This is where we can expect
the buyers to step in to position for the break above the resistance, while the
sellers will look for a break lower to increase the bearish bets into the
148.60 level next. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we get the US ISM Manufacturing PMI.
Tomorrow, we have the Trump’s tariffs deadline for Mexico, Canada and China. On
Wednesday, we have the US ADP and the US ISM Services PMI. On Thursday, we get
the latest US Jobless Claims figures. On Friday, we conclude the week with the
US NFP report.