- USD/JPY continues to decline further towards 140.00 amid soft US Dollar.
- Investors await the US core PCE price index data for further guidance.
- USD/JPY may find an intermediate cushion near upward-sloping trendline.
The USD/JPY pair consolidates in a tight range near 142.00 after a sharp correction ahead of the United States core Personal Consumption Expenditure (PCE) price index data for November, which will be published at 13:30 GMT.
The core PCE inflation report is expected to remain soft as the Federal Reserve (Fed) has been keeping interest rates unchanged in the range of 5.25-5.50%. The downside in the major would continue if the underlying inflation turns out softer-than-anticipated. Meanwhile, deepening rate cut expectations from the Federal Reserve (Fed) have weighed heavily on the US Dollar Index (DXY). The USD Index has refreshed its four-month low around 101.55.
On the Tokyo front, Japan’s National Consumer Price Index (CPI) has remained above the 2% target for the 20th time in a row. The Bank of Japan (BoJ) is expected to continue its ultra-dovish policy stance till wage growth in the Japanese economy gets high enough to keep inflation comfortably above 2%.
USD/JPY is consistently declining from more than one month. The downside momentum accelerated after a bearish crossover from the 20 and 50-day Exponential Moving Averages (EMA), which happened around 148.80. The asset is expected to decline further towards the upward-sloping trendline plotted from January 16 low at 127.22.
The Relative Strength Index (RSI) (14) is oscillating in the bearish range of 20.00-40.000, pointing to continuation of a downside momentum.
Fresh downside would appear if the asset drops below December 14 low near 141.00. This would drag it towards the upward-sloping trendline near 139.40, followed by July 28 low near 138.00.
In an alternate scenario, a recovery move above December 19 high near 145.00 would drive the asset towards December 11 high around 146.60, followed by December 6 high near 148.00.
USD/JPY daily chart
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
Gold gives away some gains, slips back to $2,980
Gold retraced from its earlier all-time highs above the key $3,000 mark on Friday, finding a footing around $2,980 per troy ounce. Profit-taking, rising US yields, and a shift to a risk-on environment seem to be putting the brakes on further gains for the metal.
EUR/USD remains firm and near the 1.0900 barrier
EUR/USD is finding its footing and trading comfortably in positive territory as the week wraps up, shaking off two consecutive daily pullbacks and setting its sights back on the pivotal 1.0900 mark—and beyond.
GBP/USD remains depressed, treads water in the low-1.2900s
GBP/USD is holding steady in consolidation territory after Friday’s opening bell on Wall Street, hovering in the low-1.2900 range. This resilience comes despite disappointing UK data and persistent selling pressure on the USD.
Crypto Today: BNB, OKB, BGB tokens rally as BTC, Shiba Inu and Chainlink lead market rebound
Cryptocurrencies sector rose by 0.13% in early European trading on Friday, adding $352 million in aggregate valuation. With BNB, OKB and BGB attracting demand amid intense market volatility, the exchange-based native tokens sector added $1.9 billion.
Week ahead – Central banks in focus amid trade war turmoil
Fed decides on policy amid recession fears. Yen traders lock gaze on BoJ for hike signals. SNB seen cutting interest rates by another 25bps. BoE to stand pat after February’s dovish cut.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.