US Dollar Forecast: USD/JPY Continues to Defend January Low

Forex trading
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By :  ,  Strategist

US Dollar Outlook: USD/JPY

USD/JPY attempts to retrace the pullback from the weekly high (147.91) as US Jobless Claims narrows to 233K in the week ending August 2 from 250K the week prior, and looming developments in the Relative Strength Index (RSI) may show the bearish momentum abating should the oscillator recover from oversold territory.

US Dollar Forecast: USD/JPY Continues to Defend January Low

USD/JPY continues to defend the January low (141.69) following the dovish comments from Bank of Japan (BoJ) Deputy Governor Shinichi Uchida, and the exchange rate may trade within the yearly range as positive data prints coming out of the US dampens speculation for an imminent Federal Reserve rate-cut.

In turn, USD/JPY may stage a larger recovery despite the recent shift in carry-trade positioning, but failure to clear the weekly high (147.91) may keep the RSI below 30.

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USD/JPY Price Chart – Daily

USDJPY Daily Chart 08082024

Chart Prepared by David Song, Strategist; USD/JPY on TradingView

  • USD/JPY holds above the January low (141.69) to pull the Relative Strength Index (RSI) back from an extreme reading but need a break/close above 148.90 (61.8% Fibonacci retracement) to bring 150.30 (61.8% Fibonacci extension) on the radar.
  • Next area of interest comes in around the monthly high (150.89) and the RSI may indicate a buy signal on a move back above 30.
  • However, the RSI may hold in oversold territory should USD/JPY struggle to clear the weekly high (147.91), and failure to hold above the 145.30 (78.6% Fibonacci retracement) to 145.90 (50% Fibonacci extension) region may push the exchange rate back towards the monthly low (141.69).

Additional Market Outlooks

Gold Price to Eye Monthly High on Failure to Close Below 50-Day SMA

US Dollar Forecast: EUR/USD Stalls Ahead of January High

British Pound Forecast: GBP/USD Susceptible to Test of July Low

--- Written by David Song, Strategist

Follow on Twitter at @DavidJSong

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