- USD/JPY finally broke with the 145.00 resistance and rose near 145.55, tallying a six-day winning streak.
- A cautious market mood supported the USD—eyes on Retail Sales from July and FOMC minutes.
- Eyes on preliminary Q2 GDP figures from Japan to be released on Tuesday.
At the start of the week, the USD/JPY rose to its highest level since November 10, 2022, mainly driven by a cautious market mood and a stronger USD. In addition, after jumping above the key resistance of 145.00, there are no signs of the Bank of Japan (BoJ) of a stealth intervention which leaves the JPY vulnerable.
On the Japanese side, Tuesday will witness the release of the Q2 Gross Domestic Product (GDP) preliminary report, with projections anticipating a rise at a yearly rate of 3.1%. Nonetheless, it's worth noting that the Bank of Japan (BoJ) has yet to show any indications of pivoting away from its accommodative monetary approach or engaging in market interference to manage the depreciation of the JPY. This lack of action could fuel an avenue for additional negative movement for the pair. However, if the Japanese economy shows signs of recovery, the BoJ might consider a pivot in its policies which could limit the Yen's losses.
On the US side, Retail Sales from July will be released on Tuesday and are expected to have expanded at a monthly pace of 0.4% from its previous figure of 0.2%. In addition, the Federal Open Market Committee (FOMC) minutes from the last July’s meeting will be closely watched by investors on Wednesday to continue placing their bets for the next Federal Reserve (Fed) decisions. As for now, according to the CME FedWatch tool, markets are confident that the Fed will skip in September while the odds of a 25 basis point (bps) hike in November rose near 40%.
USD/JPY Levels to watch
The daily chart analysis indicates a bullish outlook for the USD/JPY in the short term. The Relative Strength Index (RSI) is above its midline in positive territory, with a positive slope, aligning with the positive signal from the Moving Average Convergence Divergence (MACD), displaying green bars, and reinforcing the strong bullish sentiment. Moreover, the pair is above the 20,100,200-day Simple Moving Averages (SMAs), implying that the bulls retain control on a broader scale.
In addition, a distinct bullish dominance over sellers is evident on the four-hour chart, with indicators displaying a strong buying momentum.
Support levels: 145.00, 144.70, 144.00.
Resistance levels: 145.70, 146.00, 146.50.
USD/JPY Daily chart
-638276458025247480.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD pares gains to near 1.0450 ahead of Germany's IFO survey
EUR/USD pares gains to trade near 1.0450 in European trading on Monday, moving back toward two-year lows of 1.0332. The renewed weakness is due to a modest recovery n the US Dollar and the US Treasury bond yields. The focus shifts to German data and ECB-speak.
GBP/USD pulls back toward 1.2550 as US Dollar sell-off pauses
GBP/USD is falling back toward 1.2550 in the European session on Monday after opening with a bullish gap at the start of a new week. A pause in the US Dollar decline alongside the US Treasury bond yields weighs down on the pair. Speeches from BoE policymakers are eyed.
Gold price sticks to heavy intraday losses amid risk-on mood, holds above $2,650 level
Gold price witnessed an intraday turnaround after touching a nearly three-week high, around the $2,721-2,722 area and snapped a five-day winning streak at the start of a new week. Bets for slower Fed rate cuts also drive flows away from the non-yielding yellow metal.
Bitcoin consolidates after a new all-time high of $99,500
Bitcoin remains strong above $97,700 after reaching a record high of $99,588. At the same time, Ethereum edges closer to breaking its weekly resistance, signaling potential gains. Ripple holds steady at a critical support level, hinting at continued upward momentum.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.