Time Zone: GMT +3
Time Frame: 4 Hours (H4)
Fundamental Analysis:
The USD-JPY currency pair today faces a critical trading session with significant economic data releases from the US. Traders should closely monitor Personal Consumption Expenditures (PCE), Disposable Personal Income, and Consumer Spending reports, as better-than-forecasted results usually strengthen the USD. Additionally, speeches by Federal Reserve officials Thomas Barkin and Michelle Bowman could inject volatility depending on their commentary regarding inflation and interest rates. For JPY, traders anticipate Tokyo’s Consumer Price Index (excluding fresh food) to provide early indications of Japan’s inflationary trends, potentially influencing market sentiment towards JPY strength.
Price Action:
Technical analysis of the USD/JPY pair in the H4 timeframe shows a decisive bullish trend following a strong rebound from the lower boundary of an ascending channel. Currently, the pair is testing the middle channel line with strong bullish momentum, yet faces notable resistance around the 149.790 level, which could trigger a corrective phase before further upward attempts. Traders should watch closely for price rejection or breakout signals around this key resistance zone to confirm the next directional move.
Key Technical Indicators:
Bollinger Bands: The price has breached the upper Bollinger Band significantly, indicating a possible short-term overextension and signaling potential corrective price action soon. A retracement toward the middle band may occur, providing traders with opportunities for entry.
RSI (14): Currently at 75.55, the RSI clearly indicates overbought conditions. This suggests a high probability of price retracement or consolidation before further bullish moves resume. Traders should be cautious of potential short-term reversals.
MACD (5,15,5): The MACD indicator remains positive with the MACD line notably above the signal line, accompanied by a rising histogram. This confirms robust bullish momentum; however, traders should monitor closely for any divergence as an early reversal sign.
Support and Resistance:
Support: Immediate support lies at approximately 148.600, coinciding with the ascending channel’s middle line and the upper Bollinger Band breakout point. Further support can be found at 147.850 near recent price consolidation areas.
Resistance: A significant resistance barrier exists around the 149.790 level, aligning with previous highs and major price reaction points. A decisive breakout above this level could target the channel’s upper boundary at approximately 150.400.
Conclusion and Consideration:
The USD-JPY H4 analysis indicates strong bullish momentum reinforced by Bollinger Bands breakout, high RSI readings, and positive MACD signals. However, the pair’s overbought conditions and key resistance at 149.790 could trigger short-term corrections. Traders should remain alert to today’s critical US economic reports and Fed speeches, which may significantly influence USD volatility. Moreover, Tokyo’s CPI release could affect JPY strength, creating additional trading opportunities.
Disclaimer: The analysis provided for USD/JPY is for informational purposes only and does not constitute investment advice. Traders are encouraged to perform their own analysis and research before making any trading decisions on USDJPY. Market conditions can change quickly, so staying informed with the latest data is essential.
