Published on May 8, 2023

Daily Analysis For USD/JPY 08-05-2023

USD/JPY Analysis

Economic Events and Scenario for USD/JPY

Economic Events: -

GMT	Event	Impact	Currency
00:50	(Japan) BoJ Monetary Policy Meeting Minutes	Medium	JPY
01:00	(France) Victory in Europe Day	None	EUR
01:00	(United Kingdom) Bank Holiday for the coronation of King Charles III	None	GBP
01:30	(Japan) Jibun Bank Services PMI	Medium	JPY
01:30	(Japan) Jibun Bank Composite PMI	Low	JPY
02:30	(Australia) Building Permits MoM	Medium	AUD
02:30	(Australia) Private House Approvals MoM	Low	AUD
02:30	(Australia) Building Permits YoY	Low	AUD
02:30	(Australia) NAB Business Confidence	High	AUD
06:00	(Estonia) Inflation Rate YoY	Low	EUR
06:00	(Estonia) Inflation Rate MoM	Low	EUR
06:00	(Estonia) CPI	Low	EUR
07:00	(Finland) Balance of Trade	Low	EUR
07:00	(Germany) Industrial Production MoM	Medium	EUR
09:00	(Australia) Myfxbook AUDUSD Sentiment	Medium	AUD
09:00	(Switzerland) Myfxbook USDCHF Sentiment	Medium	CHF
09:00	(Japan) Myfxbook USDJPY Sentiment	Medium	JPY
09:00	(European Union) Myfxbook EURUSD Sentiment	Medium	EUR
09:00	(United Kingdom) Myfxbook GBPUSD Sentiment	Medium	GBP
09:00	(Canada) Myfxbook USDCAD Sentiment	Medium	CAD
09:00	(New Zealand) Myfxbook NZDUSD Sentiment	Medium	NZD
10:00	(Greece) Balance of Trade	Low	EUR
10:30	(Germany) 3-Month Bubill Auction	Low	EUR
11:00	(Spain) Consumer Confidence	Medium	EUR
11:00	(Latvia) Industrial Production MoM	Low	EUR
11:00	(Latvia) Industrial Production YoY	Low	EUR
15:00	(El Salvador) Inflation Rate YoY	Low	USD
15:00	(El Salvador) Inflation Rate MoM	Low	USD
15:00	(United States) Wholesale Inventories MoM	Low	USD
16:00	(United States) Consumer Inflation Expectations	Low	USD
16:30	(United States) 3-Month Bill Auction	Low	USD
16:30	(United States) 6-Month Bill Auction	Low	USD
23:45	(New Zealand) Electronic Retail Card Spending MoM	Low	NZD
23:45	(New Zealand) Electronic Retail Card Spending YoY	Low	NZD

Today's Scenario: - In the Asian session, the USD/JPY pair has surged above the crucial resistance of 135.00, as buyers have shown interest in the asset following the release of the dovish Bank of Japan's (BoJ) April monetary policy meeting minutes.

BoJ members have expressed their support for continuing policy easing to achieve steady inflation. While discussing the exit from the ultra-dovish policy, BoJ members have conveyed that the central bank should take into account the risks associated with the policy shift before considering it. However, one member has suggested that the BoJ should prioritize the risk of missing the price goal due to a premature policy shift over the risk of shifting policy too late.

Buy Scenario: - USD/JPY is struggling to maintain its bullish momentum after breaking its three-day downtrend. The pair retreated to 134.90 early on Monday, after an initial surge towards the 50-day Simple Moving Average (SMA), fueled by the March Monetary Policy Meeting Minutes from the Bank of Japan.

However, the pair remains above the 61.8% Fibonacci retracement level of its March downside, near 134.75, which gives hope to buyers. In addition, the bullish MACD signals and the RSI (14) line near 50 suggest a continuation of the latest rebound from an upward-sloping support line that started in late March.

Despite this, the pair is likely to face resistance at the 50-SMA level around 135.25. Moreover, the early March lows around 135.30-40 could challenge the pair's further upside. Additionally, several levels around the 137.00 round figure and double tops marked near 137.80-90 could act as further upside hurdles. Finally, the 138.00 threshold could act as the last line of defense for the USD/JPY bears. Till we did not advise to buy in USD/JPY.

Sell Scenario: - On the downside, a break of the aforementioned support line, near the 134.00 round figure, is not necessarily a welcoming sign for bears. The 200-SMA level of 133.40 could act as an additional filter to the south. Till we did not advise to sell the position in USD/JPY.

Support and Resistance Level: -