USDJPY Technical Analysis – Another wave of risk-off boosted the JPY

Fundamental Overview

The USD remains mixed across the board as there’s no real divergence in FX as the market continues to price in more and more cuts for all the central banks and the general uncertainty weighs on conviction.

At the moment, the market is more driven by the risk sentiment which changes very fast depending on the tariff headlines. Following yesterday’s selloff in the US stock markets, traders increased again the rate cuts expectations for the Fed with 105 bps of easing seen by year end and 55% chance of a rate cut at the May FOMC meeting.

On the JPY side, the currency has been driven mainly by global events rather than domestic fundamentals. The global stock market selloff and the growth fears made the market to scale back rate hikes expectations.

Traders now see the BoJ remaining on hold for the rest of the year. The Japanese Yen continues to bounce around with changes in the risk sentiment triggered by tariff headlines.

USDJPY Technical Analysis – Daily Timeframe

On the daily chart, we can see that USDJPY fell back to the lows in another bout of risk-off flows. The sellers will now want to see the price breaking below the lows to increase the bearish bets into the 140.00 handle next. The buyers, on the other hand, will want to see the price rising back above the 146.60 level to start targeting the 148.60 level again.

USDJPY Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more clearly the recent price action with the pair rolling over from the 148.00 handle and accelerating the downward momentum as the risk-off sentiment increased yesterday. The price is now bouncing around the lows. The buyers are likely stepping in here with a defined risk below the low to target a rally back into the 148.60 level. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows.

USDJPY Technical Analysis – 1 hour Timeframe

On the 1 hour chart, there’s not much else we can add here as the buyers will look for a break above the 146.60 level, while the sellers will target a break below the 144.55 low or wait for the rally into the 146.60 level to short at better prices. The red lines define the average daily range for today.

Upcoming Catalysts

Today the tariffs went into effect and the focus will remain on potential news on negotiations. Tomorrow, we get the US CPI report and the latest US Jobless Claims figures, while on Friday we conclude the week with the US PPI and the University of Michigan Consumer Sentiment survey.

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