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Market Outlook
USDJPY cooled, buying the dip is the way ahead? - Zeal Capital Market

USDJPY cooled, buying the dip is the way ahead?

01-07-2022 03:04

“US dollar cooled following PCE release, focus shifted to risky assets temporarily.”

Greenback consolidates with largest daily loss in two weeks as recent data spur recession fear among traders. According to Bureau of Economic Analysis, Core PCE Price Index for May came in at 0.3%, slightly lower than forecast of 0.4%. The report highlights slight depreciation in terms of consumption, which may be due to stubbornly high inflation and expectation for higher interest rates from Fed. Nonetheless, we expect US dollar to be well supported at the lower levels due to divergence of policy among Fed and other central banks.

Quick recap on USDJPY

The pair extended its bullish trend since early March after closing above the threshold of 116.20.

USDJPY Weekly Technical Analysis

USDJPY cooled, buying the dip is the way ahead? - Zeal Capital Market

On weekly perspective, the pair lacks bullish momentum to thrust forward, signalling a possible retracement in the near-term.

USDJPY Daily Technical Analysis

USDJPY cooled, buying the dip is the way ahead? - Zeal Capital Market

USDJPY stages its retracement from 136.66, along with the formation of bearish signal from MACD histogram.

Trading Idea

USDJPY cooled, buying the dip is the way ahead? - Zeal Capital Market

ORDER: BUY LIMIT

ENTRY: 133.00

STOP LOSS: 129.50

Target 1: 136.00

Target 2: 136.65

ZFX Analyst’s Comment

The pair is expected to undergo retracement in the near-term as bullish momentum continues to diminish. We expect a rebound near 132.10 as bulls is more likely to defend this area, like previous retesting.

Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.

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