Published on Mar 22, 2023

Daily Analysis For USD/JPY 22-03-2023

USD/JPY Analysis

Economic Events and Scenario for USD/JPY

Economic Events: -

GMT	Event	Impact	Currency
00:00	(Australia) Westpac Leading Index MoM	Low	AUD
05:30	(Netherlands) Consumer Confidence	Medium	EUR
07:00	(United Kingdom) PPI Core Output YoY	Low	GBP
07:00	(United Kingdom) PPI Core Output MoM	Low	GBP
07:00	(United Kingdom) Core Inflation Rate MoM	Low	GBP
07:00	(United Kingdom) PPI Output MoM	Low	GBP
07:00	(United Kingdom) PPI Input MoM	Low	GBP
07:00	(United Kingdom) PPI Output YoY	Low	GBP
07:00	(United Kingdom) PPI Input YoY	Low	GBP
07:00	(United Kingdom) Inflation Rate MoM	Medium	GBP
07:00	(United Kingdom) Core Inflation Rate YoY	Medium	GBP
07:00	(United Kingdom) Inflation Rate YoY	High	GBP
07:00	(United Kingdom) Retail Price Index YoY	Low	GBP
07:00	(United Kingdom) Retail Price Index MoM	Low	GBP
08:00	(Slovakia) Current Account	Low	EUR
08:00	(Switzerland) Current Account	Medium	CHF
08:45	(Euro Area) ECB President Lagarde Speech	Medium	EUR
09:00	(Euro Area) Current Account	Low	EUR
09:00	(Euro Area) Current Account s.a	Low	EUR
09:30	(Euro Area) ECB Lane Speech	Medium	EUR
10:00	(Belgium) Consumer Confidence	Low	EUR
10:00	(Italy) Current Account	Low	EUR
10:00	(United Kingdom) 5-Year Treasury Gilt Auction	Low	GBP
10:30	(Germany) 10-Year Bund Auction	Medium	EUR
11:00	(Ireland) Wholesale Prices MoM	Low	EUR
11:00	(Ireland) Wholesale Prices YoY	Low	EUR
11:00	(United Kingdom) CBI Industrial Trends Orders	Medium	GBP
11:00	(United States) MBA 30-Year Mortgage Rate	Medium	USD
11:00	(United States) MBA Mortgage Applications	Low	USD
11:00	(United States) MBA Mortgage Market Index	Low	USD
11:00	(United States) MBA Mortgage Refinance Index	Low	USD
11:00	(United States) MBA Purchase Index	Low	USD
11:30	(Portugal) Current Account	Low	EUR
12:05	(Germany) Bundesbank Mauderer Speech	Low	EUR
12:30	(Canada) New Housing Price Index MoM	Medium	CAD
12:30	(Canada) New Housing Price Index YoY	Medium	CAD
13:45	(Euro Area) ECB Panetta Speech	Low	EUR
14:00	(Kosovo) Balance of Trade	Low	EUR
14:30	(United States) EIA Refinery Crude Runs Change	Low	USD
14:30	(United States) EIA Crude Oil Stocks Change	Medium	USD
14:30	(United States) EIA Heating Oil Stocks Change	Low	USD
14:30	(United States) EIA Gasoline Production Change	Low	USD
14:30	(United States) EIA Distillate Stocks Change	Low	USD
14:30	(United States) EIA Crude Oil Imports Change	Low	USD
14:30	(United States) EIA Gasoline Stocks Change	Medium	USD
14:30	(United States) EIA Cushing Crude Oil Stocks Change	Low	USD
14:30	(United States) EIA Distillate Fuel Production Change	Low	USD
15:30	(United States) 17-Week Bill Auction	Low	USD
17:00	(Germany) Bundesbank Nagel Speech	Low	EUR
17:30	(Canada) BoC Summary of Deliberations	Medium	CAD
18:00	(United States) Fed Interest Rate Decision	High	USD
18:00	(United States) FOMC Economic Projections	High	USD
18:00	(United States) Interest Rate Projection - Longer	Medium	USD
18:00	(United States) Interest Rate Projection - Current	Medium	USD
18:00	(United States) Interest Rate Projection - 2nd Yr	Medium	USD
18:00	(United States) Interest Rate Projection - 1st Yr	Medium	USD
18:30	(United States) Fed Press Conference	High	USD
23:00	(Japan) Reuters Tankan Index	Medium	JPY

Today's Scenario: - The USD/JPY pair is currently trading around the 132.50 level, supported by the decrease in US Treasury bond yields and a relatively stable US futures market. In recent news, US Treasury Secretary, Janet Yellen, made comments during a meeting with bankers, indicating that there could be a possible extension of federal deposit guarantee to all small banks operating in the US.

Buy Scenario: - The USD/JPY pair is currently hovering around 132.50, showing a cautious market sentiment before the Federal Open Market Committee (FOMC) monetary policy meeting. The pair had a significant gain on Tuesday, bouncing back from a descending support line that was a month old and breaking a short-term resistance line. However, the 50-day moving average (DMA) at 132.50 is posing a challenge to further upside, along with bearish MACD signals and a sluggish RSI (14).

Despite these challenges, the successful rebound from the descending trend line and clear break of the previous resistance line indicate that the USD/JPY pair has the potential to overcome the 50-DMA hurdle. If it succeeds, the next important level to watch is a horizontal area between 135.10-30, which has been significant since mid-February. A break above this area could pave the way for the pair to target the 200-DMA resistance level around 137.50. Till we did not advise to buy in USD/JPY.

Sell Scenario: - On the other hand, if the USD/JPY breaks below the support-turned-resistance line around 132.00, it could signal a move towards the monthly support line near 131.00.

It is important to note that the bears in the USD/JPY market should be cautious unless the currency pair stays below an upward-sloping support line that dates back to mid-January, which is currently near 130.30. Till we did not advise to sell the position in USD/JPY.

Support and Resistance Level: -