USD/JPY is trading near a double-bottom support ahead of today's US CPI release. Despite a "hot" Non-Farm Payrolls report boosting the dollar elsewhere, this pair has erased all gains from the Japanese snap election rally, driven back down to 152.00 despite Prime Minister Sanae Takaichi’s landslide victory amid renewed intervention fears.
We are watching a potential consolidation bounce from 152.00, or a breakdown if US inflation data disappoints.
Key topics covered
Takaichi wipeout: How the PM's decisive win reignited intervention fears, forcing the market to fully erase the pre-election rally. This reset to 152.00 offers a potential technical consolidation opportunity.
Fed vs. sentiment: While Fed Governor Stephen Miran warns policy is too restrictive, a hot CPI today would reinforce Wednesday's NFP data, validating the exceptionalism narrative and potentially pushing rate cuts further down the road.
Risk drivers: Why AI disruption fears and Trump's tariff rollbacks dampened risk sentiment yesterday, adding complexity to the USD/JPY outlook.
USD/JPY scenarios:
Trade plan: Volatility will be high. We are looking at pending orders around 153.80 for the upside breakout or 153.00 for the breakdown, while being mindful of potential whipsaws.
Are you speculating on the 152.00 support holding? Share your views in the comments.
This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice.
ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
We are watching a potential consolidation bounce from 152.00, or a breakdown if US inflation data disappoints.
Key topics covered
Takaichi wipeout: How the PM's decisive win reignited intervention fears, forcing the market to fully erase the pre-election rally. This reset to 152.00 offers a potential technical consolidation opportunity.
Fed vs. sentiment: While Fed Governor Stephen Miran warns policy is too restrictive, a hot CPI today would reinforce Wednesday's NFP data, validating the exceptionalism narrative and potentially pushing rate cuts further down the road.
Risk drivers: Why AI disruption fears and Trump's tariff rollbacks dampened risk sentiment yesterday, adding complexity to the USD/JPY outlook.
USD/JPY scenarios:
- Bullish: A hot CPI validates the 152.00 support. We watch for a breakout above 153.80, targeting resistance at 154.35 and 155.60 (61.8% Fib), with a medium-term target of 157.66. A long position here offers a potential 1.7x risk-reward ratio.
- Bearish: A cool CPI could break the 152.00 floor. This opens the door to 150.29 and potentially 151.87 as the next downside targets based on Fibonacci extensions.
Trade plan: Volatility will be high. We are looking at pending orders around 153.80 for the upside breakout or 153.00 for the breakdown, while being mindful of potential whipsaws.
Are you speculating on the 152.00 support holding? Share your views in the comments.
This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice.
ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.