Time Zone: GMT +2
Time Frame: 4 Hours (H4)
Fundamental Analysis:
The USD/JPY pair is poised for potential volatility today, with impactful macroeconomic events on both sides. On the JPY side, key releases from the Bank of Japan (BOJ), including the Interest Rate Decision, Interest Rate Statement, and Press Conference, are scheduled. These releases will be closely watched for any hawkish or dovish signals on monetary policy, especially amid ongoing inflationary concerns in Japan. Additionally, the CPI (Consumer Price Index), excluding fresh food, will provide insights into domestic price pressures. From the USD perspective, Treasury International Capital (TIC) data, Existing Home Sales, and commentary from FOMC member John Williams could influence investor sentiment. Any hawkish tone from the Fed or strong economic indicators may support USD strength. Together, these events create a highly reactive environment for USDJPY H4 analysis.
Price Action:
The USDJPY H4 chart shows that the pair has recently pulled back after testing the 157.860 level, marked as the 100% Fibonacci retracement. Since then, the price has formed lower highs, indicating some bearish correction within a broader bullish trend. However, the 61.8% Fibonacci level has acted as a key support, holding the price multiple times. Currently, price action shows that the pair is attempting to break above the Ichimoku Cloud, which may open the way for renewed bullish momentum if successfully broken. Until then, the cloud acts as dynamic resistance, and price needs to close decisively above it for confirmation of trend continuation.
Key Technical Indicators:
Ichimoku Cloud: The price is currently testing the Ichimoku Cloud from below. The cloud is relatively flat, indicating a neutral to slightly bearish bias. A clean breakout above the cloud would indicate a bullish continuation, while rejection could signal further consolidation or downside. The Tenkan-sen and Kijun-sen lines are entangled, suggesting indecision in the current market direction.
MACD (12, 26, 9): The MACD line is at 0.0837, and the signal line is at 0.0400, showing a bullish crossover with increasing histogram bars. This suggests bullish momentum is slowly returning, although the overall trend still lacks strong conviction. A further divergence between the MACD and signal lines could validate upward price movement.
RSI (14): The RSI is currently at 55.36, indicating neutral to mildly bullish momentum. The RSI is neither overbought nor oversold, suggesting that the pair has room to move higher without facing immediate exhaustion. Continued RSI movement above 50 may support bullish continuation if supported by price action.
Support and Resistance:
Support: A strong support zone is seen near the 61.8% Fibonacci retracement at 154.750, where the price has bounced multiple times.
Resistance: The next key resistance lies at 157.860 (Fibonacci 100%), which marked the recent swing high and remains a strong ceiling.
Conclusion and Consideration:
The USDJPY H4 chart technical analysis reflects a market in a temporary consolidation after a strong uptrend. While price has been forming lower highs, the repeated defense of the 61.8% Fibonacci support level and bullish signals from the MACD suggest a possible reversal to the upside if the Ichimoku Cloud is breached. With today’s high-impact economic events from both the Bank of Japan and the US Fed, traders should be cautious of volatility spikes and potential trend reversals. A decisive break above the cloud may confirm a continuation of the bullish trend, targeting the 157.860 level, while a rejection may lead to a retest of the 154.75 zone.
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.
