Published on Mar 8, 2023

Daily Analysis For USD/JPY 08-03-2023

USD/JPY Analysis

Economic Events and Scenario for USD/JPY

Economic Events: -

GMT		Event	Currency
03:35	-	(Japan) 6-Month Bill Auction	JPY
05:00	-	(Japan) Coincident Index	JPY
05:00	-	(Japan) Leading Economic Index	JPY
05:00	-	(Japan) Eco Watchers Survey Current	JPY
05:00	-	(Japan) Eco Watchers Survey Outlook	JPY
12:00	-	(United States) MBA 30-Year Mortgage Rate	USD
13:15	-	(United States) ADP Employment Change	USD
13:30	-	(United States) Exports	USD
13:30	-	(United States) Imports	USD
13:30	-	(United States) Balance of Trade	USD
15:00	-	(United States) JOLTs Job Openings	USD
15:00	-	(United States) Fed Chair Powell Testimony	USD
15:30	-	(United States) EIA Crude Oil Stocks Change	USD
15:30	-	(United States) EIA Gasoline Stocks Change	USD
23:50	-	(Japan) Foreign Bond Investment	JPY
23:50	-	(Japan) Stock Investment by Foreigners	JPY
23:50	-	(Japan) GDP Growth Rate QoQ	EUR
23:50	-	(Japan) GDP Growth Annualized	JPY
23:50	-	(Japan) GDP External Demand QoQ	JPY
23:50	-	(Japan) GDP Private Consumption QoQ	JPY
23:50	-	(Japan) GDP Price Index YoY	JPY

Today's Scenario: - The USD/JPY currency pair is making gains and moving towards the 138.00 level, reaching its highest point in the past three months during Wednesday's Asian session. The rally is attributed to the hawkish testimony of Fed Chair Powell, which has emphasized the policy divergence between the Federal Reserve and the Bank of Japan. Investors are closely watching for updates on the US jobs data and the upcoming decision of the Bank of Japan, as these events are expected to have a significant impact on the performance of the currency pair.

Buy Scenario: - It is worth noting that the recent rise of the USD/JPY currency pair may be attributed to a successful break above the 100-day moving average (DMA) hurdle. However, the immediate upside is limited by the 200-DMA level located around 137.45-50, which is compounded by the overbought conditions of the Relative Strength Index (RSI) (14).

Even if the bulls of the USD/JPY currency pair manage to surpass this key moving average, they will face further resistance from an upward-sloping resistance line that has been in place since early February. This resistance line is situated around 138.35 at present and could potentially impede any further advances by the pair.

In the event that the bulls of the USD/JPY currency pair ignore the RSI conditions and manage to maintain control beyond the aforementioned resistance line, they will encounter an additional upside filter in the form of the 50% Fibonacci retracement level of its downturn from October 2022 to January 2023. This level is situated around 139.60 and could prove to be a significant hurdle for the currency pair to overcome. Till we did not advise to buy in USD/JPY.

Sell Scenario: - On the downside, the short-term movement of the USD/JPY currency pair is limited by the 38.2% Fibonacci retracement level and the 100-day moving average, which are located at around 136.70 and 136.25, respectively.

Furthermore, the bears of the currency pair need to keep a close eye on a one-month-old ascending support line. This support line is currently situated around 135.45 and is likely to be a crucial level for the bears to watch in the event of a further downside movement. Till we did not advise to sell the position in USD/JPY.

Support and Resistance Level: -