Daily Analysis For USD/JPY   04-05-2023

Daily Analysis For USD/JPY 04-05-2023

USD/JPY Analysis
Economic Events and Scenario for USD/JPY
Economic Events: -
01:00(Japan) Greenery DayNoneJPY
01:00(Latvia) Declaration of Independence DayNoneEUR
01:01(Ireland) AIB Services PMILowEUR
02:30(Australia) Exports MoMLowAUD
02:30(Australia) Imports MoMLowAUD
02:30(Australia) Balance of TradeHighAUD
02:45(China) Caixin Manufacturing PMIHighCNY
06:00(Estonia) Industrial Production MoMLowEUR
06:00(Estonia) Industrial Production YoYLowEUR
07:00(Germany) Balance of TradeHighEUR
07:00(Germany) Exports MoMMediumEUR
07:00(Germany) Imports MoMLowEUR
08:00(Spain) Unemployment ChangeHighEUR
08:00(Spain) Tourist Arrivals YoYLowEUR
08:15(Spain) S&P Global Services PMIHighEUR
08:15(Spain) S&P Global Composite PMILowEUR
08:45(Italy) S&P Global Services PMIHighEUR
08:45(Italy) S&P Global Composite PMILowEUR
08:50(France) S&P Global Services PMIMediumEUR
08:50(France) S&P Global Composite PMILowEUR
08:55(Germany) S&P Global Services PMIHighEUR
08:55(Germany) S&P Global Composite PMILowEUR
09:00(Euro Area) S&P Global Composite PMILowEUR
09:00(Euro Area) S&P Global Services PMIHighEUR
09:00(United Kingdom) New Car Sales YoYLowGBP
09:30(United Kingdom) S&P Global/CIPS UK Services PMIHighGBP
09:30(United Kingdom) Net Lending to Individuals MoMLowGBP
09:30(United Kingdom) Mortgage ApprovalsMediumGBP
09:30(United Kingdom) Mortgage LendingMediumGBP
09:30(United Kingdom) BoE Consumer CreditMediumGBP
09:30(United Kingdom) S&P Global/CIPS Composite PMILowGBP
09:40(Spain) Index-Linked Obligacion AuctionLowEUR
09:40(Spain) Obligacion AuctionLowEUR
09:40(Spain) Bonos AuctionLowEUR
09:40(Spain) 3-Year Bonos AuctionLowEUR
10:00(France) New Car Registrations YoYLowEUR
10:00(Cyprus) Inflation Rate YoYLowEUR
10:00(Cyprus) Inflation Rate MoMLowEUR
10:00(Euro Area) PPI MoMLowEUR
10:00(Euro Area) PPI YoYLowEUR
10:00(France) 10-Year OAT AuctionLowEUR
11:00(Ireland) Unemployment RateLowEUR
12:30(Germany) New Car Registrations YoYLowEUR
12:30(United States) Challenger Job CutsLowUSD
13:15(Euro Area) Marginal Lending RateLowEUR
13:15(Euro Area) Deposit Facility RateHighEUR
13:15(Euro Area) ECB Interest Rate DecisionHighEUR
13:30(Canada) ImportsLowCAD
13:30(Canada) ExportsLowCAD
13:30(Canada) Balance of TradeHighCAD
13:30(United States) Unit Labour Costs QoQMediumUSD
13:30(United States) Nonfarm Productivity QoQMediumUSD
13:30(United States) Jobless Claims 4-week AverageHighUSD
13:30(United States) Continuing Jobless ClaimsHighUSD
13:30(United States) Initial Jobless ClaimsHighUSD
13:30(United States) Balance of TradeHighUSD
13:30(United States) ExportsMediumUSD
13:30(United States) ImportsMediumUSD
13:45(Euro Area) ECB Press ConferenceHighEUR
15:00(Canada) Ivey PMI s.aHighCAD
15:30(United States) EIA Natural Gas Stocks ChangeLowUSD
15:30(United States) NY Fed Treasury Purchases TIPS 1 to 7.5 yrsLowUSD
16:30(United States) 8-Week Bill AuctionLowUSD
16:30(United States) 4-Week Bill AuctionLowUSD

Today's Scenario: - Following a widely anticipated 25 basis point rate hike, the USD/JPY pair experienced a significant sell-off, dropping to around 134.40 during the Asian session. However, the pair has now found an intermediate cushion after the abrupt decline. This selling pressure was triggered by the Federal Reserve's neutral interest rate guidance, which contributed to the negative sentiment towards the asset.
Investors were particularly concerned about the Fed's guidance, as it suggested that future rate hikes may be less aggressive than previously expected. This caused many traders to reduce their positions in the USD/JPY pair, as they began to perceive the asset as less attractive compared to other options.
Despite this setback, the USD/JPY pair remains an important currency pair for many investors, and its performance is closely watched by analysts and traders around the world. As the global economic outlook continues to evolve, it is likely that we will see continued volatility in this asset.

Buy Scenario: - Buyers of the USD/JPY pair will need to overcome the immediate multi-day resistance zone around 135.15-25 to gain short-term bullish momentum.
Even if they succeed in doing so, there are still multiple obstacles ahead, including resistance near 136.70, the round figure of 137.00, and the 138.00 threshold, before they can take control of the currency pair. Till we did not advise to buy in USD/JPY.

Sell Scenario: - The USD/JPY pair is currently trading near the weekly low around 134.50 early on Thursday. This marks the third consecutive day of decline for the currency pair, as it tests the 21-day Exponential Moving Average (EMA) and an upward-sloping support line from March 24, located around 134.40-50.
It is important to note that the USD/JPY pair has failed to close above 138.00 on a daily basis, which, when combined with the recent pullback that broke the previous support zone around 135.25-15, gives hope to bearish traders.
The looming bear cross on the Moving Average Convergence Divergence (MACD) indicator also adds to the downside bias.
However, the 21-day EMA and a five-week-old ascending support line are currently providing support near the 134.50-40 confluence area.
If the USD/JPY pair breaks below this support level, the convergence of the 50-day EMA and 200-day EMA around 133.85 will be a key area to watch for the bears. Till we did not advise to sell the position in USD/JPY.

Support and Resistance Level: -
S1 134.05-R1 135.99
S2 133.40-R2 137.28
S3 132.11-R3 137.93


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