- USD/JPY continues to side-ways trade in the 149.00 - 150.00 range, as investors await fresh catalysts.
- Retail Sales from the US from September will be released on Tuesday.
- BoJ's prospects of intervening in markets to stop the Yen’s depreciation may limit the upward potential.
- The Fed’s dovish narrative is taking relevance and is limiting the USD’s upside potential.
On Monday, the USD/JPY traded with mild gains above 149.50, mainly driven by the JPY’s weakness. Likewise, the Greenback is performing poorly against its rivals as its DXY index consolidates last week’s gains after rising above 106.00.
Retail Sales figures from the US for September will provide markets with additional data on the US economy to continue placing their bets on the Federal Reserve's (Fed) future decisions. In the meantime, according to the World Interest Rates Probabilities (WIRP), tightening expectations are low, mainly driven by the Fed’s doves, which refrained from committing to another rate hike in last week's Fed meeting minutes, but the US is still not showing signs of cooling down which would push the Fed to hike one more time in this tightening cycle.
Comments from Thomas Harker were interpreted as dovish on Monday after he reiterated that the Fed is “likely” done with rate hikes. Several other officials will be on the wires on Tuesday and Wednesday, including Michelle Bowman, Christopher Waller, and John Williams, and dovish comments may add selling pressure to the green currency.
The Bank of Japan (BoJ) is attached to its dovish stance, and markets are pricing in a liftoff in 2024, so monetary policy divergences between its peers leave the JPY vulnerable. On the positive side, investors are expecting the bank to intervene to stop the depreciation of the Yen, which could limit the potential of the upward movements of the pair.
USD/JPY Levels to watch
The USD/JPY suggests a neutral to bearish technical outlook in the short-term as bullish momentum wanes. The Relative Strength Index (RSI) has turned flat above its midline, while the Moving Average Convergence (MACD) displays stagnant red bars. The pair is still above the 20,100,200-day Simple Moving Averages (SMA), however, highlighting the continued dominance of bulls on the broader scale.
Support levels: 149.00 (20-day SMA), 148.00, 147.30.
Resistance levels: 150.00, 150.50, 151.00.
USD/JPY Daily Chart
-638330764493023935.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 treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
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.