Daily Analysis For USD/JPY   15-05-2023

Daily Analysis For USD/JPY 15-05-2023

USD/JPY Analysis
Economic Events and Scenario for USD/JPY
Economic Events: -
00:50(Japan) PPI YoYLowJPY
00:50(Japan) PPI MoMLowJPY
01:00(Euro Area) Eurogroup MeetingMediumEUR
01:01(Ireland) Construction PMILowEUR
02:30(Australia) Building Permits MoMLowAUD
02:30(Australia) Private House Approvals MoMLowAUD
02:30(Australia) Building Permits YoYLowAUD
02:30(China) PBoC 1-Year MLF AnnouncementLowCNY
04:45(Japan) 5-Year JGB AuctionLowJPY
06:00(Estonia) Unemployment RateLowEUR
06:00(Finland) CPILowEUR
06:00(Finland) Inflation Rate YoYLowEUR
06:00(Finland) Inflation Rate MoMLowEUR
07:00(Germany) Wholesale Prices MoMMediumEUR
07:00(Germany) Wholesale Prices YoYMediumEUR
07:00(Japan) Machine Tool Orders YoYLowJPY
07:30(Switzerland) Producer & Import Prices YoYLowCHF
07:30(Switzerland) Producer & Import Prices MoMLowCHF
08:00(China) FDI (YTD) YoYMediumCNY
08:00(Lithuania) Current AccountLowEUR
08:00(Slovakia) Inflation Rate YoYLowEUR
08:00(Slovakia) Core Inflation Rate YoYLowEUR
08:00(Slovakia) Core Inflation Rate MoMLowEUR
08:00(Slovakia) CPILowEUR
08:00(Slovakia) Inflation Rate MoMLowEUR
09:00(Australia) Myfxbook AUDUSD SentimentMediumAUD
09:00(Switzerland) Myfxbook USDCHF SentimentMediumCHF
09:00(Japan) Myfxbook USDJPY SentimentMediumJPY
09:00(European Union) Myfxbook EURUSD SentimentMediumEUR
09:00(United Kingdom) Myfxbook GBPUSD SentimentMediumGBP
09:00(Canada) Myfxbook USDCAD SentimentMediumCAD
09:00(New Zealand) Myfxbook NZDUSD SentimentMediumNZD
10:00(Belgium) Construction Output YoYLowEUR
10:00(Euro Area) Industrial Production MoMMediumEUR
10:00(Euro Area) Industrial Production YoYLowEUR
10:30(Germany) 12-Month Bubill AuctionLowEUR
11:00(Spain) Consumer ConfidenceMediumEUR
11:00(Latvia) Current AccountLowEUR
11:00(Ireland) Balance of TradeLowEUR
13:15(Canada) Housing StartsMediumCAD
13:30(Canada) Wholesale Sales MoMLowCAD
13:30(United States) NY Empire State Manufacturing IndexMediumUSD
13:45(United States) Fed Bostic SpeechMediumUSD
14:00(Belgium) Balance of TradeLowEUR
14:00(France) 3-Month BTF AuctionLowEUR
14:00(France) 12-Month BTF AuctionLowEUR
14:00(France) 6-Month BTF AuctionLowEUR
14:15(United States) Fed Kashkari SpeechMediumUSD
15:00(Canada) Financial System SurveyMediumCAD
16:30(United States) 3-Month Bill AuctionLowUSD
16:30(United States) 6-Month Bill AuctionLowUSD
17:30(United States) Fed Barkin SpeechMediumUSD
21:00(United States) Foreign Bond InvestmentLowUSD
21:00(United States) Overall Net Capital FlowsLowUSD
21:00(United States) Net Long-term TIC FlowsMediumUSD
22:00(United States) Fed Cook SpeechMediumUSD

Today's Scenario: - USD/JPY continues its three-day winning streak, trading near 135.80, despite a slight pullback from the highest level in eight days as Tokyo opens on Monday. The movement of the Yen pair is influenced by the overall strength of the US Dollar in a risk-off environment. Additionally, it is supported by softer economic data from Japan and dovish remarks made by Bank of Japan (BoJ) Governor Kazuo Ueda.
Japan's Producer Price Index (PPI) for April recently showed a decline of 0.2% on a monthly basis and 5.8% on a yearly basis, falling short of expectations of 0.3% and 6.0% respectively. This weaker inflation data aligns with Governor Ueda's defense of the BoJ's accommodative monetary policy. In his latest comments reported by Reuters, Governor Ueda stated, "The central bank will maintain ultra-low interest rates until the recent cost-push inflation shifts into sustained price growth driven by robust domestic demand, and accompanied by higher wages."

Buy Scenario: - USD/JPY is showing strength and remains firm around 136.00, marking a three-day uptrend and reaching a one-week high in early Monday trading.
The Yen pair is benefiting from the previous day's breakout above a horizontal resistance area that has been in place since April 28, near 135.50. Additionally, it successfully surpassed the 200-hour moving average (HMA) level around 134.90.
However, there is a horizontal resistance zone that has been in existence for the past 11 days, which, combined with the overbought reading on the relative strength index (RSI) with a period of 14 and sluggish signals from the moving average convergence divergence (MACD), is hindering further gains for the USD/JPY bulls around the 136.40-45 resistance area.
If the buyers of the Yen pair manage to overlook the aforementioned obstacles, there is a possibility of a rally towards the previous monthly high around 137.80, followed quickly by the yearly high set in March near 137.90. The 138.00 level could be the next threshold to watch. Till we did not advise to buy in USD/JPY.

Sell Scenario: - On the downside, if the mentioned HMAs near 134.90-80 are broken, it does not necessarily imply a clear path for the USD/JPY bears, as an upward-sloping support line from April 26, close to 134.00, may act as the final defense for the buyers.
Overall, USD/JPY could experience further upward movement, although there may be limited room for gains in the near term. Till we did not advise to sell the position in USD/JPY.

Support and Resistance Level: -
S1 134.82-R1 136.19
S2 133.92-R2 136.66
S3 133.45-R3 137.56


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