Published on Apr 18, 2023

Daily Analysis For USD/JPY 18-04-2023

USD/JPY Analysis

Economic Events and Scenario for USD/JPY

Economic Events: -

GMT	Event	Impact	Currency
01:00	(Cyprus) Orthodox Easter Tuesday	None	EUR
02:30	(Australia) RBA Meeting Minutes	High	AUD
03:00	(China) Industrial Capacity Utilization	Low	CNY
03:00	(China) Retail Sales YoY	High	CNY
03:00	(China) Industrial Production YoY	High	CNY
03:00	(China) Fixed Asset Investment (YTD) YoY	Medium	CNY
03:00	(China) GDP Growth Rate YoY	High	CNY
03:00	(China) GDP Growth Rate QoQ	Medium	CNY
03:00	(China) Unemployment Rate	High	CNY
07:00	(United Kingdom) Average Earnings excl. Bonus (3Mo/Yr)	Low	GBP
07:00	(United Kingdom) Average Earnings incl. Bonus (3Mo/Yr)	Medium	GBP
07:00	(United Kingdom) Unemployment Rate	High	GBP
07:00	(United Kingdom) Claimant Count Change	High	GBP
07:00	(United Kingdom) Employment Change	High	GBP
07:00	(United Kingdom) HMRC Payrolls Change	Low	GBP
09:00	(Italy) Balance of Trade	Medium	EUR
09:40	(Spain) 3-Month Letras Auction	Low	EUR
10:00	(China) FDI (YTD) YoY	Medium	CNY
10:00	(Euro Area) ZEW Economic Sentiment Index	Medium	EUR
10:00	(Euro Area) Balance of Trade	Medium	EUR
10:00	(Germany) ZEW Current Conditions	Low	EUR
10:00	(Germany) ZEW Economic Sentiment Index	High	EUR
10:00	(United Kingdom) 30-Year Treasury Gilt Auction	Low	GBP
11:00	(Ireland) Balance of Trade	Low	EUR
13:30	(Canada) New Motor Vehicle Sales	Low	CAD
13:30	(Canada) Inflation Rate MoM	Medium	CAD
13:30	(Canada) Core Inflation Rate YoY	Medium	CAD
13:30	(Canada) Inflation Rate YoY	High	CAD
13:30	(Canada) Core Inflation Rate MoM	Low	CAD
13:30	(Canada) CPI Median YoY	High	CAD
13:30	(Canada) CPI Trimmed-Mean YoY	High	CAD
13:30	(United States) Housing Starts	Medium	USD
13:30	(United States) Building Permits	High	USD
13:30	(United States) Housing Starts MoM	Medium	USD
13:30	(United States) Building Permits MoM	Medium	USD
13:55	(United States) Redbook YoY	Low	USD
14:00	(Ecuador) Balance of Trade	Low	USD
14:00	(Euro Area) ECB Elderson Speech	Low	EUR
16:00	(New Zealand) Global Dairy Trade Price Index	Low	NZD
16:30	(United States) 52-Week Bill Auction	Low	USD
18:00	(United States) Fed Bowman Speech	Medium	USD
21:30	(United States) API Crude Oil Stock Change	Medium	USD

Today's Scenario: - USD/JPY is struggling to maintain its bullish momentum, despite having a three-day winning streak. The pair is currently trading at 134.50, having eased from its intraday high and the highest levels since March 15.

The recent discussions surrounding the Bank of Japan's (BoJ) easy monetary policy appear to be weighing on the Yen pair. BoJ decision-makers are facing challenges from bond buying and fiscal moves while trying to defend the current policy.

BoJ Governor Kazuo Ueda recently commented that BoJ bond purchases are not aimed at monetizing government debt. He also added that "interest rates are determined by various factors."

BoJ Deputy Governor Shinichi Uchida has also defended the current monetary policy, stating that "fiscal constraints won't undermine the ability to carry out monetary policy."

Buy Scenario: - To maintain its bullish momentum, the USD/JPY currency pair needs to stay above the pivot level of 134.235 and aim for the First Major Resistance Level (R1) at 134.761. A break above Monday's high of 134.571 would indicate a positive session for the pair. However, this bullish scenario is contingent on supportive data from China and comments from the Federal Reserve.

If the bullish trend continues, the next targets for the bulls would be the Second Major Resistance Level (R2) at 135.097 and resistance at 135.500. The Third Major Resistance Level (R3) is located at 135.959. Till we did not advise to buy in USD/JPY.

Sell Scenario: - On the other hand, if the USD/JPY pair falls below the pivot level, it could face support at the First Major Support Level (S1) at 133.899. Unless there is a strong risk-off sentiment, the currency pair is unlikely to drop below the Second Major Support Level (S2) at 133.373 or the Third Major Support Level (S3) at 132.511. Till we did not advise to sell the position in USD/JPY.

Support and Resistance Level: -