Open an Account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open an Account
✖

USDJPY Analysis: Preparing for September Policies

Article By: ,  Market Analyst
August 30, 2024 6:04 AM

Key Events Today:

  • Tokyo Core CPI Rises to 2.4%: Marking the fourth consecutive increase
  • European Flash CPI Estimate: Matches the expected inflation drop to 2.2%
  • US Core PCE: Waited for insights into the upcoming September monetary policies

Next Week:

  • US Bank Holiday (Monday): Irregular volatility is expected
  • US ISM Manufacturing PMI (Tuesday): A leading economic indicator
  • US JOLTS Job Openings (Wednesday): A key indicator of overall employment
  • ADP Non-Farm Employment Change (Thursday): Provides an early look at employment trends
  • ISM Services PMI (Thursday): A leading indicator, challenging current inflation rate trends
  • US Non-Farm Payrolls (Friday): A critical indicator of economic activity
  • FOMC Member Williams' Statement (Friday)

The long-anticipated Fed rate cut for 2024 is near, with upcoming employment indicators set to play a crucial role in determining its magnitude, alongside today’s US Core PCE data. From the Yen’s perspective, Tokyo’s Core CPI surpassing the central bank’s target could set a hawkish tone for the BOJ at its September policy meeting. With both Dovish US and Hawkish Japanese policies in focus, the USDJPY may face increased bearish pressures.

Next week’s US data is expected to bring high volatility to the US Dollar, with leading economic indicators and non-farm payrolls data culminating in key remarks from Fed member Williams.

Technical Outlook

USDJPY Analysis: USDJPY – Weekly Time Frame – Log Scale

Source: Tradingview

On a weekly time frame, the chart continues to respect the support established by the Dragonfly Doji pattern, which aligns with the Relative Strength Index (RSI) retesting levels from January 2023. The key support levels remain near the extremes of the pattern, between 141.70 and 140, before potentially targeting the July 2023 low at the 137 zone.

On the upside, the trendline connecting consecutive higher lows from January, March, and December 2023 serves as the resistance and a critical barrier between the chart’s downtrend and any potential continuation of an uptrend.

A bullish trend could emerge if the price closes above the 150-barrier, with expected levels at 152 and 154. Given the trajectory of upcoming monetary policies from the Fed and BOJ, bearish dominance currently appears on the chart. However, this could shift if upcoming data supports a bullish reversal, confirming the presence of the Dragonfly Doji pattern.

--- Written by Razan Hilal, CMT – on X: @Rh_waves

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