Fundamental
Overview
The US dollar remains under
pressure as we got a few bearish catalysts this week. Month-end flows might also be responsible for
dollar weakness.
On the JPY side, nothing
has changed fundamentally, and the currency has been mainly driven by the risk
sentiment. As a reminder, the BoJ kept interest rates unchanged at 0.5% and
reduced the bond tapering plan for fiscal year 2026 as expected at the last
meeting. The BoJ continues to place a great deal on the US-Japan trade deal and
the evolution of inflation.
USDJPY
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that USDJPY continues to roll over towards the bottom of the recent range
around the 142.35 level. The price is now breaking further below the 144.25 zone which should see the sellers increasing their bearish bets into the 142.35 support. If the price rises back above the zone, we can expect the buyers to step in to position for a rally back into the 146.28 level next.
USDJPY Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can
see we now have a downward trendline defining the bearish momentum on this
timeframe
