USDJPY Technical Analysis – JPY lacks bullish drivers

Fundamental
Overview

The USD remained supported since last Thursday’s US NFP report as the data came out better
than expected and triggered a hawkish repricing in interest rates expectations.
Unfortunately for the greenback, that wasn’t enough as wage growth came out on
the softer side which limited further repricing and more sustained gains.

On the JPY side, we got
some disappointing wage growth figures yesterday and the US-Japan negotiations
don’t look to be going well. As a reminder, the BoJ continues to place a great
deal on the US-Japan trade deal before looking at adjusting rates. So, negative
news on the trade front erodes the hopes for another rate hike by year-end.

USDJPY
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDJPY reached the top of the range around the 146.28 level. The
buyers will likely continue to keep pushing into the 148.28 resistance
where we can expect the sellers to step in with a defined risk above the
resistance to position for another drop back into the 142.35 support.

USDJPY Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the range between the 142.35 support and the 146.28 resistance.
The sellers will likely step in around these levels with a defined risk above
the resistance to position for a drop back into the 144.35 zone. The buyers, on
the other hand, will look for a break higher to increase the bullish bets into
the 148.28 level next.

USDJPY Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a minor upward trendline defining the bullish momentum on
this timeframe. The buyers will likely continue to lean on the trendline to
keep pushing into new highs, while the sellers will want to see the price
breaking below the trendline and the 144.35 zone to gain more conviction for
further downside. The red lines define the average daily range for today.

Upcoming
Catalysts

This week, the only notable events are the US tariff letters
and trade deals expected to be fully rolled out by tomorrow, and the US Jobless
Claims figures on Thursday.

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