- For ten consecutive trading sessions, the USD/JPY pair has been moving within narrow ranges with a strong bullish bias, with gains reaching the resistance level of 158.00.
- This is the highest for the pair in five months, paving the way for bulls to move towards the psychological resistance of 160.00.
From now on, you may notice an increase in Japanese statements about the possibility of intervening in the exchange markets to prevent further collapse of the Japanese yen, which historically contradicts the policies of the upcoming US administration, as Trump refuses to intervene in the exchange markets. Keep in mind that the movement of the dollar against the Japanese yen price for long periods in narrow ranges portends a strong move in one of the two directions.
Trading Tips:
We still recommend buying the dollar against the Japanese yen from every downward level, but without risk and placing stop loss profit orders
US Dollar Performance Awaits the Future of Interest Rate Policies
The US dollar is trading near its two-year high, supported by a shift in US Federal Reserve policies and the continuation of Trump's trade. The Federal Reserve has cut US interest rates by a full percentage point in three steps since September 2024. Federal Reserve Chairman Jerome Powell described the latest move as "closer to a call," adding that the federal funds rate is now "much less restrictive." It currently falls within the range of 4.25% to 4.5%.
Fed officials' expectations for US interest rates this year indicate a median estimate of only two more cuts this year. Also, four officials preferred not to cut US interest rates at all in December 2024. Moreover, Cleveland Federal Reserve President Beth Hammack opposed the decision in favour of keeping interest rates steady.
Top Forex Brokers
USD/JPY Technical Analysis and Expectations Today:
The USD/JPY pair recently retreated to trade at the 100-hour moving average line. However, the pair continues to move towards the overbought levels of the 14-hour Relative Strength Index (RSI). In the near term, bulls will look to extend the current rally towards the 157.75 resistance levels and then the 158.90 resistance levels respectively. On the other hand, bears will look to take advantage of the selling to move towards the 156.80 support levels or lower at the 155.95 support.
In the long term, according to the performance on the daily chart, the USD/JPY pair is trading within an ascending channel formation. Also, the 14-day RSI supports a long-term bullish bias as it is about to enter overbought levels. Therefore, bulls will look to move towards stronger highs beyond the usual Japanese intervention levels reaching the 161.20 and 164.00 resistance levels respectively. In contrast, and over the same period of time, bears will look to move with renewed profit-taking selling operations, reaching the support levels of 155.30 and then the support of 152.00, respectively.
Want to trade our USD/JPY forex analysis and predictions? Here's a list of forex brokers in Japan to check out.