USD/JPY 4H Chart – Technical & Fundamental Analysis
On the 4-hour time frame, price is in a clear downtrend, forming lower highs and lower lows. As the downward movement continues, we’ve identified a minor key resistance level at 148.800, along with two minor key support levels — one at 146.000 near the current price, and another at 140.400.
Price has already broken below the minor support, triggering sellers’ pending orders. This also serves as an accumulation phase for market makers. As expected, price did not immediately continue pushing lower below the next support level. Instead, market makers aimed for a liquidity hunt — which has now occurred, pushing price upwards and liquidating sellers’ stop-losses, creating a clear liquidity zone.
Our current objective is to wait for price to break below the minor key level and then place a sell stop order at 145.920, with a stop-loss at 148.100 (above the liquidity zone), and take-profit at 140.960 — the next minor support. This setup offers a 1:2 risk-to-reward ratio.
Fundamental Outlook:
USD/JPY remains under pressure amid a weakening U.S. dollar, driven by soft labor market data and heightened economic uncertainty. This week’s U.S. Unemployment Claims are projected at 223K, up from 219K, reflecting potential labor market softening. A higher-than-expected print may dampen expectations for additional rate hikes by the Federal Reserve, weighing further on the dollar.
In contrast, the Japanese yen has strengthened on the back of improved domestic data and renewed safe-haven demand. Upward revisions to Japan’s GDP, along with stable inflation figures, have increased confidence in the yen. Furthermore, recent remarks from the Bank of Japan hinting at a more hawkish tone have added to the currency’s appeal. Global geopolitical risks — including potential trade tensions tied to former President Trump’s resurgence — are also reinforcing the yen’s safe-haven status.
Disclaimer:
This analysis is for informational and educational purposes only and should not be considered financial advice. Trading involves substantial risk, and past performance is not indicative of future results. Always conduct your own research and consult with a financial professional before making any investment decisions.