Daily Analysis For USD/JPY 03-05-2023

Daily Analysis For USD/JPY 03-05-2023

USD/JPY Analysis
USD/JPY
Economic Events and Scenario for USD/JPY
Economic Events: -
GMTEventImpactCurrency
00:00(Australia) Ai Group Industry IndexMediumAUD
00:00(Australia) Judo Bank Services PMIHighAUD
00:00(Australia) Judo Bank Composite PMILowAUD
00:00(Australia) Ai Group Construction IndexLowAUD
00:00(Australia) Ai Group Manufacturing IndexLowAUD
01:00(China) May DayNoneCNY
01:00(Japan) Constitution Memorial DayNoneJPY
02:30(Australia) Retail Sales MoMHighAUD
02:30(Australia) RBA Chart PackLowAUD
07:45(France) Budget BalanceLowEUR
09:00(Italy) Unemployment RateHighEUR
10:00(Cyprus) Unemployment RateLowEUR
10:00(Euro Area) Unemployment RateHighEUR
10:00(France) New Car Registrations YoYLowEUR
10:00(United Kingdom) 2-Year Treasury Gilt AuctionLowGBP
10:30(Germany) 7-Year Bund AuctionLowEUR
11:00(Belgium) New Car Registrations YoYLowEUR
11:00(Portugal) Industrial Production YoYLowEUR
11:00(Portugal) Industrial Production MoMLowEUR
11:10(European Union) 6-Month Bill AuctionLowEUR
11:10(European Union) 3-Month Bill AuctionLowEUR
11:30(Portugal) Budget BalanceLowEUR
12:00(United States) MBA 30-Year Mortgage RateMediumUSD
12:00(United States) MBA Mortgage ApplicationsLowUSD
12:00(United States) MBA Mortgage Refinance IndexLowUSD
12:00(United States) MBA Mortgage Market IndexLowUSD
12:00(United States) MBA Purchase IndexLowUSD
12:30(Germany) New Car Registrations YoYLowEUR
13:15(United States) ADP Employment ChangeHighUSD
14:30(United States) Treasury Refunding AnnouncementLowUSD
14:45(United States) S&P Global Composite PMIMediumUSD
14:45(United States) S&P Global Services PMIHighUSD
15:00(United States) ISM Non-Manufacturing PricesLowUSD
15:00(United States) ISM Non-Manufacturing New OrdersLowUSD
15:00(United States) ISM Non-Manufacturing EmploymentMediumUSD
15:00(United States) ISM Non-Manufacturing PMIHighUSD
15:00(United States) ISM Non-Manufacturing Business ActivityLowUSD
15:00(United States) Total Vehicle SalesLowUSD
15:30(United States) EIA Refinery Crude Runs ChangeLowUSD
15:30(United States) EIA Crude Oil Stocks ChangeMediumUSD
15:30(United States) EIA Distillate Stocks ChangeLowUSD
15:30(United States) EIA Heating Oil Stocks ChangeLowUSD
15:30(United States) EIA Gasoline Production ChangeLowUSD
15:30(United States) EIA Crude Oil Imports ChangeLowUSD
15:30(United States) EIA Gasoline Stocks ChangeMediumUSD
15:30(United States) EIA Cushing Crude Oil Stocks ChangeLowUSD
15:30(United States) EIA Distillate Fuel Production ChangeLowUSD
16:30(United States) 17-Week Bill AuctionLowUSD
19:00(United States) Fed Interest Rate DecisionHighUSD
19:30(United States) Fed Press ConferenceHighUSD
23:45(New Zealand) Building Permits MoMLowNZD
Today's Scenario: - The USD/JPY pair experienced a decline during the American session as the Japanese Yen gained momentum due to risk aversion. This caused the pair to drop from a seven-week high near 137.75 to 136.36, reaching a new daily low.
Market sentiment was impacted by the underperformance of US regional bank stocks on Tuesday, despite the takeover of First Republic Bank.
Moreover, the US data released was slightly weaker than expected ahead of Wednesday's FOMC decision. Market participants still expect a 25 basis point rate hike, but bets of a rate cut later in the year have increased in the last few hours. As a result, the US 10-year Treasury yield is declining by more than 4% to 3.43%, while the 2-year yield fell from 4.14% to 3.94%, hitting the lowest levels since last Thursday. The Japanese Yen is benefiting from the decrease in government bond yields. The stock market indexes on Wall Street are experiencing a drop of over 1.5%, while the VIX (Volatility Index) has surged by 20%.
Buy Scenario: - To continue its bullish momentum, the USD/JPY pair needs to break through the pivot level at 136.866 and aim for the first major resistance level (R1) at 137.418. This would require support from the market risk sentiment and the Fed's policy. If the bulls continue their rally, the pair may test the Tuesday high of 137.773 and 138, but may fall short of the second major resistance level (R2) at 138.325. The third major resistance level (R3) is at 139.784. Till we did not advise to buy in USD/JPY.
Sell Scenario: - On the downside, if the pair fails to move through the pivot, the first major support level (S1) at 135.959 may come into play. However, it is expected to avoid falling below 135.5 and the second major support level (S2) at 135.407, barring a significant sell-off of the US dollar. The third major support level (S3) is at 133.948. Till we did not advise to sell the position in USD/JPY.
Support and Resistance Level: -
SupportResistance
S1 135.99-R1 137.45
S2 135.42-R2 138.34
S3 134.52-R3 138.91

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