USD/JPY outlook: Surges after Fed and BoJ policy decisions

Slobodan Drvenica Windsor Brokers

USD/JPY

USDJPY spiked to new multi-month high on Thursday, after Bank of Japan kept interest rates unchanged in today’s policy meeting, adding to positive signals for dollar from Fed’s hawkish rate cut on Wednesday.

Although BoJ’s decision did not surprise (markets widely expected unchanged rates at 0.15%) the central bank pointed to cautious approach to the monetary policy in the near future, in light of implications of policies of incoming Trump’s administration and also more careful asses the incoming economic data.

Dovish BoJ and persisting gap between monetary policies of two central banks added pressure on yen and created more favorable conditions for the US dollar.

Fresh bulls cracked former top at 156.74 (Nov 15), signaling an end of corrective phase and likely continuation of an uptrend from 139.57 (2024 low, posted on Sep 16).

Sustained break of 156.74 barrier is needed to confirm signal and open way for further gains, with 157.86 (July 16 high) to come in focus.

On the other hand, daily studies are overbought and warn that fresh bulls may take a breather after strong rally, but the dollar is expected to remain well supported, with limited dips seen as positioning for fresh push higher.

Res: 157.14; 158.00; 158.66; 159.00.
Sup: 155.88; 154.72; 154.43; 153.41.

Interested in USD/JPY technicals? Check out the key levels

1. R3 156.64
2. R2 155.71
3. R1 155.2
PP 154.27
1. S1 153.76
2. S2 152.82
3. S3 152.31

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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