USDJPY, Nasdaq Forecast: Steep Drops Ahead of NVDIA Earnings and Tokyo CPI

Key Events:

• USD/JPY's decline faces reversal risks ahead of Tokyo Core CPI and U.S. Core PCE
• NVIDIA stock dropped 3% this week ahead of earnings reports
• Trump’s tariff deadlines for Canada and Mexico approach at the end of the month

USDJPY Outlook

The Japanese yen may have reached a turning point against the dollar as it retests support levels near December 2024 lows. Optimism surrounding the yen has been driven by strong economic growth and inflation data, with Friday’s Tokyo Core CPI release expected to confirm or challenge this sentiment.

Following Japan’s inflation data, the U.S. Core PCE— the Federal Reserve’s preferred inflation gauge— will also be reported on Friday, influencing market expectations regarding inflation risks and the Fed’s rate policy.

Nasdaq Outlook

Nasdaq retreated toward 21,300 this week, down nearly 300 points from Monday’s open. Alongside U.S. inflation concerns, President Donald Trump reaffirmed during a Monday press conference that tariffs on Mexico and Canada will proceed "on time, on schedule," sustaining market uncertainty.

NVIDIA’s earnings report on Wednesday will be closely watched as it reflects the company’s performance amid tariff concerns and increasing competition in the AI sector. NVIDIA’s stock has declined nearly 3% this week, not only due to trade tensions and competitive pressures but might also be due to yen strength and carry trade concerns impacting investor sentiment.

Technical Analysis: Quantifying Uncertainties

USDJPY Forecast: 3-Day Time Frame – Log Scale

Source: Tradingview

The USD/JPY pair remains indecisive between the 149 and 150 levels, aligning with December 2024 lows. A decisive close below 148 could trigger a decline toward the lower boundary of USD/JPY’s duplicated uptrend channel (January 2023–July 2024), with key support at 146.90-147 and 143.60—levels corresponding to Fibonacci retracement ratios of 0.618 and 0.786, respectively.

On the upside, if the pair climbs above 151.60, potential targets extend to 155, 157, and 159.

Nasdaq Forecast: 3-Day Time Frame – Log Scale

Source: Tradingview

Nasdaq's recent drop below 22,000 has revived double-top risks on the chart. The key neckline of this pattern lies at 20,700, a level where the index previously rebounded between December 2024 and February 2025.

A firm close below 20,700 could accelerate losses toward support at 20,300, 20,000, 19,700, and 19,150. Conversely, Nasdaq must reclaim 21,700 to restore bullish sentiment, with further upside expectations at 22,200. A clear hold above this level could push the index toward record highs at 22,800 and 23,300.

Written by Razan Hilal, CMT

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