US Dollar Forecast: USD/JPY on Cusp of Testing Yearly High
US Dollar Outlook: USD/JPY
USD/JPY is on the cusp of the yearly high (151.72) as it extends the series of higher highs and lows from the start of the week, and the exchange rate may track the positive slope in the 50-Day SMA (149.11) as it bounces back ahead of the moving average.
US Dollar Forecast: USD/JPY on Cusp of Testing Yearly High
USD/JPY stage a five-day rally as Federal Reserve Chairman Jerome Powell warns that ‘Inflation has given us a few head fakes,’ and the Greenback may continue to appreciate against the Japanese Yen as the Bank of Japan (BoJ) sticks to Quantitative and Qualitative Easing (QQE) with Yield Curve Control (YCC).
Join David Song for the Weekly Fundamental Market Outlook webinar. David provides a market overview and takes questions in real-time. Register Here
As a result, speculation surrounding US monetary policy may sway USD/JPY as Chairman Powell warns that ‘if it becomes appropriate to tighten policy further, we will not hesitate to do so,’ and fresh data prints coming out of the US may force the central bank to pursue a more restrictive policy as the Consumer Price Index (CPI) is expected to reveal sticky inflation.
US Economic Calendar
The core CPI is projected to increase 0.3% for the third consecutive month, with the year-over-year reading anticipated to hold steady at 4.1% in October, and indications of steady price growth may prop up USD/JPY as it puts pressure on the FOMC to further combat inflation.
However, a softer-than-expected CPI report may generate a bearish reaction in the US Dollar as it encourages the Federal Open Market Committee (FOMC) to keep US interest rates unchanged, and waning expectations for another Fed rate-hike may rattle the recent advance in USD/JPY as the central bank appears to be nearing the end the end of its hiking-cycle.
With that said, speculation surrounding US monetary policy may sway USD/JPY as the BoJ seems to be in no rush to switch gears, and the exchange rate may track the positive slope in the 50-Day SMA (149.11) as it bounces back ahead of the moving average.
USD/JPY Price Chart – Daily
Chart Prepared by David Song, Strategist; USD/JPY on TradingView
- USD/JPY bounces back ahead of the 50-Day SMA (149.11) to stage a five-day rally, with the exchange rate approaching the yearly high (151.72) as it seems to be tracking the positive slope in the moving average.
- The recent series of higher highs and lows may lead to a test of the 2022 high (151.95), with the next area of interest coming in around the July 1990 high (152.25) followed by the 153.50 (50% Fibonacci extension) area.
- Nevertheless, USD/JPY may struggle to retain the bullish price series if it struggles to clear the yearly high (151.72), with a move below 149.40 (100% Fibonacci extension) to 150.30 (61.8% Fibonacci extension) region bringing the moving average back on the radar.
Additional Market Outlooks:
Euro Forecast: EUR/USD Bounces Ahead of 50-Day SMA to Eye Monthly High
US Dollar Forecast: GBP/USD Vulnerable if Monthly Low Breaks
--- Written by David Song, Strategist
Follow on Twitter at @DavidJSong
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.
GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.
© FOREX.COM 2024