In recent technical analyses of the USD/JPY currency pair it is ready for new record bullish breaches, as it returned to the levels of Japanese intervention in the market. This was not hinted by Japan, and accordingly, the gains of the dollar-yen pair increased towards the resistance level of 146.40, its highest in 25 years. As I mentioned before, the clear contrast between the Fed's hawkish policy and the strong US economic performance, in contrast, the BoJ's negative interest policy, and Japan's faltering economic performance will remain. This is a continuous bullish factor for the currency pair.
Minutes of latest meeting to be released
The Federal Reserve will release the substance of the minutes of its latest interest rate policy meeting on Wednesday. At last month's meeting, Federal Reserve officials raised the central bank's key interest rate by three-quarters of a percentage point and signaled more significant increases ahead. The Fed raised borrowing rates in an attempt to squash the highest inflation in decades. The danger is that if the Fed goes too far, it could pressure the US economy and cause a recession.
Tomorrow, Thursday, the Labor Department will release its September report on US consumer inflation. Americans continue to face rising costs, which is reflected in the series of sharp annual increases in the CPI since the summer of last year. Prices for US consumers jumped 8.3% in August from a year earlier. This followed annual increases of 8.5% in July and 9.1% in June. Economists expect the CPI to rise 8.1% in the twelve months to September.
Forecast of the US dollar against the yen today:
- The bullish trend of the USD/JPY currency pair is getting stronger.
- There is a clear ignoring by investors of the technical indicators' arrival towards overbought levels as far as the interest in the currency pair's gains factors.
- The targets of the bulls closest to the current performance are the resistance levels of 146.85 and 147.50, respectively.
It is better to sell and wait for profit-taking sales. I would not recommend buying the currency pair from its current highs and better wait for stronger selling levels.
On the downside, the first shift of the current trend is that it is necessary to move below the support level 142.00 as a start. Today, the dollar-yen will await the announcement of the minutes of the last meeting of the US Federal Reserve.
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