- 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 consolidates gains below 1.0750, upside potential seems limited
The EUR/USD pair consolidates gains around 1.0745 during the early European session on Wednesday. Data released on Tuesday showed that the annual inflation rate in the Eurozone cooled down in June, in line with the market consensus.
GBP/USD flat lines below 1.2700, looks to US data/FOMC minutes for some impetus
GBP/USD lacks firm intraday direction on Wednesday amid mixed fundamental cues. August BoE rate cut bets cap the GBP ahead of the UK general elections on Thursday. Traders also seem reluctant and prefer to wait for the release of the FOMC minutes.
Gold eyes a range breakout, as Fed Minutes looms
Gold price is trading around a flatline near $2,330 early Wednesday, as traders consider the recent US jobs data and Federal Reserve Chairman Jerome Powell’s speech, bracing for yet another busy US calendar.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Bitcoin struggles around $64,000 level
Bitcoin faces resistance near the $64,000 daily level, leading to a 1.05% decline in trading on Wednesday. Ethereum and Ripple similarly encounter resistance, resulting in 1% and 0.5% declines, respectively.
UK election update: Labour slips in the polls, but remains trusted with the economy
With one day left before the election, the polls suggest that it will be an easy win for Labour, the question is the magnitude of their victory. The final polls before election day have seen support for Labour slip.