Published on May 18, 2023

Daily Analysis For USD/JPY 18-05-2023

USD/JPY Analysis

Economic Events and Scenario for USD/JPY

Economic Events: -

GMT	Event	Impact	Currency
00:50	(Japan) Foreign Bond Investment	Low	JPY
00:50	(Japan) Stock Investment by Foreigners	Low	JPY
00:50	(Japan) Imports YoY	Low	JPY
00:50	(Japan) Exports YoY	Medium	JPY
00:50	(Japan) Balance of Trade	High	JPY
01:00	(Austria) Ascension Day	None	EUR
01:00	(Belgium) Ascension Day	None	EUR
01:00	(Euro Area) Ascension Day	None	EUR
01:00	(Finland) Ascension Day	None	EUR
01:00	(France) Ascension Day	None	EUR
01:00	(Germany) Ascension Day	None	EUR
01:00	(Luxembourg) Ascension Day	None	EUR
01:00	(Netherlands) Ascension Day	None	EUR
01:00	(Switzerland) Ascension Day	None	CHF
02:30	(Australia) Part Time Employment Chg	Medium	AUD
02:30	(Australia) Participation Rate	Low	AUD
02:30	(Australia) Full Time Employment Chg	Medium	AUD
02:30	(Australia) Unemployment Rate	High	AUD
02:30	(Australia) Employment Change	High	AUD
04:00	(East Timor) Inflation Rate YoY	Low	USD
04:00	(East Timor) Inflation Rate MoM	Low	USD
04:35	(Japan) 52-Week Bill Auction	Low	JPY
07:30	(Euro Area) ECB Guindos Speech	High	EUR
09:00	(Spain) Balance of Trade	Medium	EUR
09:40	(Spain) Obligacion Auction	Low	EUR
09:40	(Spain) 5-Year Bonos Auction	Low	EUR
10:00	(Euro Area) ECB President Lagarde Speech	Medium	EUR
11:00	(Portugal) PPI MoM	Low	EUR
11:00	(Portugal) PPI YoY	Low	EUR
11:00	(Slovakia) Unemployment Rate	Low	EUR
11:30	(Portugal) Private Consumption YoY	Low	EUR
11:30	(Portugal) Economic Activity YoY	Low	EUR
13:30	(United States) Philadelphia Fed Manufacturing Index	Medium	USD
13:30	(United States) Philly Fed Business Conditions	Low	USD
13:30	(United States) Philly Fed CAPEX Index	Low	USD
13:30	(United States) Philly Fed Employment	Low	USD
13:30	(United States) Philly Fed New Orders	Low	USD
13:30	(United States) Philly Fed Prices Paid	Low	USD
13:30	(United States) Initial Jobless Claims	High	USD
13:30	(United States) Jobless Claims 4-week Average	High	USD
13:30	(United States) Continuing Jobless Claims	High	USD
13:30	(Canada) New Housing Price Index YoY	Medium	CAD
13:30	(Canada) New Housing Price Index MoM	Medium	CAD
14:05	(United States) Fed Jefferson Speech	Medium	USD
14:30	(United States) Fed Barr Testimony	Medium	USD
15:00	(United States) Existing Home Sales MoM	High	USD
15:00	(United States) Existing Home Sales	High	USD
15:00	(United States) CB Leading Index MoM	Low	USD
15:00	(United States) Fed Logan Speech	Medium	USD
15:30	(United States) EIA Natural Gas Stocks Change	Low	USD
16:30	(United States) 8-Week Bill Auction	Low	USD
16:30	(United States) 4-Week Bill Auction	Low	USD
18:00	(United States) 10-Year TIPS Auction	Low	USD
20:00	(El Salvador) Balance of Trade	Low	USD
23:45	(New Zealand) Balance of Trade	Medium	NZD
23:45	(New Zealand) Exports	Low	NZD
23:45	(New Zealand) Imports	Low	NZD

Today's Scenario: - During the Asian session, the USD/JPY pair is gaining momentum and is poised to reach a new five-month high above 138.00. The pair is exhibiting significant strength, driven by the expectation that the Bank of Japan (BoJ) will maintain its accommodative monetary policy to support sustained inflationary pressures at higher levels.

Buy Scenario: - A daily close above the aforementioned resistance line around 137.80 would require confirmation from the round figure of 138.00 and the late 2022 peak around 138.20.

If buyers of the USD/JPY pair sustain control above 138.20, there is a possibility of a rally towards the psychological level of 140.00.

Overall, while the USD/JPY is likely to experience further pullback, the overall trend remains bullish. Till we did not advise to buy in USD/JPY.

Sell Scenario: - The decline in the USD/JPY pair can be attributed to not only sluggish market conditions and the inability to surpass the key resistance line but also the fact that the RSI (14) line is approaching overbought levels, favoring the recent pullback.

Nevertheless, the pair finds support from the 200-day moving average (DMA) around the 137.00 level.

If the USD/JPY continues its bearish trend below 137.00, sellers might face a challenge near the 38.2% Fibonacci retracement level of the pair's decline from October 2022 to January 2023, located around 136.65.

In the event that the USD/JPY remains bearish beyond 136.65, attention will shift to an upward-sloping support line from March 24 and the 50-DMA, which are approximately 134.50 and 133.80, respectively. Till we did not advise to sell the position in USD/JPY.

Support and Resistance Level: -