Fundamental Overview
The USD hasn’t done much since the FOMC decision as the market awaits something new to push into either direction. The Fed delivered on expectations with no surprises whatsoever. The central bank kept rates steady, reduced the QT pace, revised growth lower and inflation higher, and kept the dot plot mostly unchanged.
Fed Chair Powell acknowledged the current uncertainty around Trump’s policies and the inflation outlook but confirmed that the economy remains healthy, and the Fed is in a good position to wait for more clarity.
The only noteworthy comment was the dismissal of the rise in the long-term inflation expectations in the University of Michigan Consumer Sentiment survey as he labelled it as an outlier given that other metrics show long term expectations stable or even slightly lower.
On the JPY side, the BoJ kept everything unchanged as expected with the statement acknowledging heightened uncertainty surrounding Japan’s economy, adding a new reference to the “evolving situation regarding trade.”
This suggests that policymakers are closely monitoring Trump’s tariff policies, with global trade developments remaining a key risk factor for Japan’s outlook. The market continues to expect 32 bps of tightening by year-end with particular focus on inflation data as recently we started to see some easing.
USDJPY Technical Analysis – Daily Timeframe
USDJPY Daily
On the daily chart, we can see that USDJPY eventually managed to pull back into the trendline where we got a rejection as the sellers stepped in with a defined risk above the trendline to position for a drop into the 140.00 handle. The buyers will need to see the price breaking above the trendline to regain some control and start targeting the 160.00 handle next.
USDJPY Technical Analysis – 4 hour Timeframe
USDJPY 4 hour
On the 4 hour chart, we can see that the price broke below the upward minor trendline that was defining the bullish momentum on this timeframe. The sellers are likely to pile in around these levels with a defined risk above the broken trendline to position for new lows. The buyers, on the other hand, will want to see the price rising back above the broken trendline to start targeting the break above the major trendline.
USDJPY Technical Analysis – 1 hour Timeframe
USDJPY 1 hour
On the 1 hour chart, there’s not much else we can add here as the sellers will look to pile in as long as the price stays below the broken trendline, while the buyers will want to see the price rising back above the broken trendline to regain some conviction for more upside. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the latest US Jobless Claims figures, while tomorrow we conclude the week with the Japanese CPI.
Source: USDJPY Technical Analysis – BoJ and Fed maintain the status quo
