USDJPY Technical Analysis – Approaching key levels

<p>US:</p><ul><li>The Fed <a href="https://www.forexlive.com/centralbank/the-fomc-keeps-the-target-fed-funds-range-at-525-to-550-20230920/">left interest rates unchanged</a> as
expected.</li><li>The macroeconomic projections were revised higher
as the economy showed much stronger resilience than expected and the Dot Plot
showed that the majority of members still expects another rate hike by the end
of the year with less rate cuts in 2024.</li><li><a href="https://www.forexlive.com/centralbank/highlights-from-the-fed-chair-powells-press-conference-after-september-rate-decision-20230920/">Fed Chair Powell</a>
reaffirmed their data dependency but added that they will proceed carefully as
they are trying to find the optimal level of rates. Powell also added that the
soft landing is not the base case at the moment, although they are aiming for
it.</li><li>The latest <a href="https://www.forexlive.com/news/us-august-cpi-06-mm-versus-06-mm-expected-20230913/">US CPI</a> came
in line with expectations, so the market’s pricing remained roughly the same. </li><li>The <a href="https://www.forexlive.com/news/us-august-non-farm-payrolls-187k-vs-170k-expected-20230901/">labour market</a>
displayed signs of softening although it remains fairly solid as seen also
yesterday with the strong beat in <a href="https://www.forexlive.com/news/us-initial-jobless-claims-201k-versus-225k-estimate-20230921/">Jobless Claims</a>. </li><li>The market doesn’t expect the Fed to hike again at
the moment.</li></ul><p>Japan:</p><ul><li>The BoJ <a href="https://www.forexlive.com/centralbank/boj-makes-no-change-to-its-major-policy-planks-no-change-to-forward-guidance-20230922/">kept everything unchanged</a> as expected.</li><li>The <a href="https://www.forexlive.com/news/japan-august-inflation-cpi-excluding-fresh-food-energy-43-yy-prior-43-20230921/">Japanese CPI</a> last week showed that inflationary
pressures remain high with the core-core reading hovering at the cycle highs.</li><li>The <a href="https://www.forexlive.com/news/japan-data-july-unemployment-rate-27-expected-25-20230828/">Unemployment Rate</a> surprisingly increased last month,
although it remains near cycle lows.</li><li>The <a href="https://www.forexlive.com/news/japan-september-preliminary-manufacturing-pmi-486-prior-496-20230922/">Japanese Manufacturing PMI</a> fell further into contraction but
the Services PMI remains in expansion.</li><li><a href="https://www.forexlive.com/centralbank/boj-governor-ueda-will-not-hesitate-to-take-additional-easing-measures-if-necessary-20230922/">BoJ governor Ueda</a> repeated that they will not
hesitate to take additional easing measures if needed and clarified that the
recent comment on “quiet exit” from monetary easing was misinterpreted. </li><li>The recent <a href="https://www.forexlive.com/news/japan-july-real-wages-fall-25-yy-and-household-spending-falls-5-yy-20230907/">Japanese wage data</a> showed a slowing in wage growth,
and this is something the BoJ focuses on particularly. </li></ul><p>USDJPY Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see
that the USDJPY pair is now getting close to the 150.00 handle, which is what
many market participants have been targeting, and it’s also near the upper
bound of the rising channel. We might finally see a decent correction from
those levels, but the market will need a good catalyst to kick off the
pullback. As long as the US data remains strong and the Japanese data doesn’t
show a pick-up in wages, we might see further upside in the bigger picture.</p><p>USDJPY Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that the USDJPY has
been <a href="https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/">diverging</a> with the
<a href="https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/">MACD</a> for a
long time and this is generally a sign of weakening momentum often followed by
pullbacks or reversals. The price action has also formed what looks like a <a href="https://www.forexlive.com/Education/chart-patterns-guide-20220125/">rising wedge</a>, which
is a reversal pattern. The sellers are likely to step in here around the upper
bound of the wedge and target the break below the lower bound of the pattern
which is eventually likely to cause a selloff into the 145.00 <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">support</a>. </p><p>USDJPY Technical
Analysis – 1 hour Timeframe</p><p>On the 1 hour chart, we can see that in
case of a pullback, the buyers are likely to lean on the previous <a href="https://www.forexlive.com/Education/technical-analysis-polarity-20220408/">resistance turned
support</a> around the 148.45 level where there’s also the <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a> with
the 38.2% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci
retracement</a> level and the 4-hour red 21 <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving average</a>. In
case of a break lower, the sellers will pile in even more targeting the lower
bound of the wedge. </p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">Today</a> we will see the latest US Consumer Confidence
report which surprised to the downside the last time and weighed on the USD in
the short term as Treasury yields fell. On Thursday, we will have another US
Jobless Claims data which keeps on showing strength in the labour market
maintaining the hawkish pricing in interest rates expectations. Finally, on
Friday, we will get the latest US PCE data and a few Japanese economic releases
such as the Tokyo CPI, the Unemployment Rate and Retail Sales. </p>

This article was written by FL Contributors at www.forexlive.com.