Daily Price Outlook

The USD/JPY currency pair failed to prolong its upward rally and currently trades near 146.37 during the Asian trading hours on Tuesday. The recent foreign investor selling of Japanese Government Bonds (JGBs), could influence the USD/JPY currency pair. The central bank's actions to weaken the yen might push the pair higher.

Furthermore, the concerns about policy adjustments due to changes in Yield Curve Control (YCC) could add uncertainty, impacting the yen's value. As a result, the USD/JPY pair might see fluctuations as market players gauge the central bank's moves and investor sentiment evolves.

Impact of Rising Japanese Bond Yields on USD/JPY Currency Pair

Moreover, the recent improvement in Japan's growth and inflation numbers has led to higher yields on 10-year and 30-year Japanese Government Bonds (JGBs), reaching their highest levels since 2014 at around 0.66% and 1.66% respectively. This increase in bond yields is strengthening the market's belief that the Bank of Japan could be moving away from its very loose monetary policy, especially after adjusting the Yield Curve Control (YCC) policy.

As Japan's bond yields rise, the Yen may gain strength. A stronger Yen could potentially put downward pressure on the USD/JPY currency pair, as the US Dollar might weaken against the resilient Yen.

Factors Influencing USD/JPY Amidst Market Caution and Bond Yield Changes

In the meantime, the positive US data and concerns about the banking sector, along with China's economic recovery efforts falling short, create cautious market sentiment and boost bond yields. The Yen benefits as a safe haven. Also, a labor survey indicating high wage expectations contributes to the risk-off mood and stronger bond yields. These factors combined could weaken the USD/JPY currency pair, as the Yen gains strength amid market uncertainty and firmer bond rates.

Moving on, the upcoming US housing data, Japan's inflation figures, and policymakers' speeches will play a role in USD/JPY trading. Crucially, all eyes are on Fed Chair Jerome Powell's speech at the Jackson Symposium on Friday, which will heavily influence the currency pair's movement.

USD/JPY - Technical analysis

The USD/JPY currency pair experienced an upward surge in the previous trading session, following a breach of the bullish flag's resistance line highlighted in our previous analysis. This propelled the pair towards the awaited positive target at 146.55. It's worth noting that the price's positive momentum has waned as it embarks on the current trading day.

Notably, the stochastic indicator exhibits a negative overlap, thereby bolstering the likelihood of potential downturns in the forthcoming sessions. This outlook anticipates a decline towards the levels of 145.15 and subsequently 144.55, identified as the primary negative waypoints.

Given the prevailing circumstances, a bearish bias is to be anticipated for today's trading session. It's pertinent to acknowledge that a breakthrough above the 146.55 level could trigger a resumption of the primary bullish trend, facilitating further gains with a potential target of 147.00. The projected trading range for the day is foreseen to span between the support level at 145.00 and the resistance level at 146.55.

Daily Price Outlook

The USD/JPY currency pair is keeping its position around the mid-145.00s on Wednesday's Asian session. However, its upward momentum can be attributed to the robust US dollar, which gained strength from the impressive retail sales figures recently released. These numbers signal strong consumer spending and a boost to the overall economy. This positive outlook creates expectations of potential interest rate hikes by the Federal Reserve, enhancing the dollar's appeal to investors and potentially fortifying it further. All these factors are contributing to the gains seen in the USD/JPY currency pair.

USD Strength Continues Amidst Fed Confidence and Strong Retail Sales

The broad-based US dollar continues to build on its recent strong performance, reaching a peak not seen in over two months. This upswing is largely driven by the growing belief that the Federal Reserve (Fed) will maintain higher interest rates for an extended period. This belief gained strength following positive news released on Tuesday.

Accordig to the latest data, Retail Sales for July surged by 0.7%, surpassing both the earlier revised 0.3% and the expected 0.4% increase. Notably, sales excluding automobiles saw an impressive 1% rise, marking the most substantial monthly growth since January. This highlights robust consumer spending and the remarkable resilience of the US economy, bolstering the Fed's hawkish stance. Consequently, this is lending support to the USD/JPY pair.

Factors Influencing USD/JPY Pair and Future Outlook

Moreover, worries about Japan stepping in to prevent their currency from dropping further are holding back the USD/JPY pair's upward movement. Meanwhile, the Bank of Japan's more dovish stance prevents the Japanese Yen from getting too strong. Also, the difference in interest rates between the US and Japan has grown, as people expect the Fed to raise rates by 0.25% more by year-end. This setup suggests that the USD/JPY pair might rise in the short term.

Looking forward, traders are keeping an eye on upcoming US economic reports like Building Permits, Housing Starts, and Industrial Production, which could affect the USD's movement and give direction to the USD/JPY pair. However, all eyes are on the FOMC meeting minutes, as they will strongly impact USD demand in the short term and guide the next move for this currency pair.

USD/JPY - Technical analysis

Yesterday, the USD/JPY pair showcased further positive momentum, inching closer to our anticipated target of 146.00. The pair remains buoyed above the bullish trend line, reinforcing prospects for continued upward movement in both intraday and short-term frames, with the next bullish milestone pegged at 146.80.

Consequently, forecasts suggest a continued bullish trajectory in the near future, bolstered by the EMA50 underpinning the price. However, it's worth noting that a dip below 145.00 could instigate a temporary bearish pullback before the pair resumes its upward climb. Today's trading is projected to oscillate between a support of 144.80 and resistance at 146.40.

Daily Price Outlook

The USD/JPY pair has shown a sustained upward trend in early trading today, supported by the short-term upward correctional trend and the presence of a trend line. Additionally, trading above the 50-day SMA and positive signals from the RSI, despite reaching overbought levels, have further bolstered the bullish sentiment.

Considering these factors, we anticipate that the USD/JPY pair will continue to gain momentum, with the next key target being the pivotal resistance level of 145.00.

Our price prediction for today suggests a trading range between the support level of 141.50 and the resistance level of 145.00, indicating potential opportunities for bullish moves.

Traders are advised to closely monitor the price action and consider the bullish trend in their trading strategies for the USD/JPY pair. However, it is essential to exercise caution and implement risk management practices, given the dynamic nature of the market.

USD/JPY - Trade Idea

Entry Price – Sell Below 143.149

Take Profit – 141.927

Stop Loss – 144.178

Risk to Reward – 1: 1.9

Profit & Loss Per Standard Lot = +$122/ -$102

Profit & Loss Per Micro Lot = +$12/ -$10

Daily Price Outlook

The USD/JPY currency pair has eased its upward momentum and experienced a marginal loss of 0.03%. However, it has managed to recover some of these losses and has been influenced by notable developments shaping its recent movements. In the midst of these changes, the pair successfully regained the 143.30 level during the Asian session.

However, the Bank of Japan (BoJ) recently surprised the market by deciding to keep its very low-interest rates. They also changed how they control the yield curve, allowing the 10-year yield to go higher, as long as it stays below 1.0% instead of the old limit of 0.5%. This shows that the BoJ is focused on keeping a policy that helps the economy. BoJ Deputy Governor Shinichi Uchida also said that having an easy policy is really important to make sure Japan's economy stays stable.

Hence, the BoJ's unexpected decision to maintain low rates and adjust its yield curve strategy could influence the USD/JPY pair. It might impact the yen's strength and the pair's overall movement.

On the flip side, the US economy is sending mixed signals as July's ISM Manufacturing PMI improved slightly to 46.4, it didn't meet expectations, indicating ongoing challenges in the manufacturing sector. Furthermore, in June, the number of job openings (JOLTS) decreased to 9.58 million, raising concerns about the job market.

These economic indicators might affect the Federal Reserve's approach to policies, leading them to be cautious. Consequently, the US Dollar could strengthen, potentially causing the USD/JPY pair to rise.

Upcoming Focus and Future Outlook

Looking forward, traders are awaiting the US ADP Employment Change report, which will likely influence the overall risk sentiment for the USD/JPY pair. However, all eyes are on the US monthly employment report, known as the NFP report, which is sure to capture the market's attention.

USD/JPY - Technical Analysis

The USD/JPY pair has shown a sustained upward trend in early trading today, supported by the short-term upward correctional trend and the presence of a trend line. Additionally, trading above the 50-day SMA and positive signals from the RSI, despite reaching overbought levels, have further bolstered the bullish sentiment.

Considering these factors, we anticipate that the USD/JPY pair will continue to gain momentum, with the next key target being the pivotal resistance level of 145.00.

Our price prediction for today suggests a trading range between the support level of 141.50 and the resistance level of 145.00, indicating potential opportunities for bullish moves.

Traders are advised to closely monitor the price action and consider the bullish trend in their trading strategies for the USD/JPY pair. However, it is essential to exercise caution and implement risk management practices, given the dynamic nature of the market.

Daily Price Outlook

The USD/JPY currency pair has prolonged its upward rally and remains strong above the 143.00 level. The pair has experienced a robust rally for three days in a row, reaching a three-week high. However, the Japanese Yen has been weighed down by the Bank of Japan's (BoJ) dovish outlook, as Governor Kazuo Ueda emphasizes the need for continued monetary support and potential further easing.

Besides this, an unscheduled bond-buying operation by the Japanese central bank added to the JPY's weakness. These factors, combined with a risk-on sentiment in the markets, are providing support for the USD/JPY currency pair.

Positive Market Sentiment and Fed Rate Hike Expectations Boost USD/JPY

Investors are feeling very positive about China's potential stimulus measures, which are outweighing concerns about weaker data and contributing to the rise in global equity markets. Moreover, the US Dollar is gaining strength, pushing the USD/JPY pair higher. The USD Index is currently at its highest level since July 10, driven by expectations of further policy tightening by the Federal Reserve (Fed). The recent upbeat US GDP report and comments from Fed Chair Jerome Powell have increased expectations of a rate hike. Higher US Treasury bond yields are also providing support to the USD.

US Economic Data and Risk Sentiment Influence USD/JPY

Investors are keeping a close eye on the upcoming ISM Manufacturing PMI and JOLTS Job Openings data in the US. These indicators could impact the USD price and, along with global risk sentiment, further boost the USD/JPY pair. The fundamental outlook suggests that the pair is likely to continue moving higher, with ongoing support for the USD and downward pressure on the JPY. As the week unfolds, investors will closely monitor economic developments and statements from central banks that could influence the direction of the USD/JPY pair.

USD/JPY - Technical Analysis

The USD/JPY pair exhibits a stronger bullish bias as it approaches our initial target at 143.05. A detailed analysis of the chart reveals the completion of a double bottom pattern, indicating positive targets beyond the mentioned level, with potential objectives at 144.00, followed by 145.05.

Consequently, we maintain our outlook for a bullish trend in the upcoming period, anticipating favorable momentum to drive the price towards the expected targets. It is essential to emphasize that sustaining above 141.40 is crucial to ensure the continuity of the bullish wave.

For today's trading, we anticipate the price to trade within the range of 142.00 support and 143.50 resistance.

Daily Price Outlook

The USD/JPY pair exhibits a stronger bullish bias as it approaches our initial target at 143.05. A detailed analysis of the chart reveals the completion of a double bottom pattern, indicating positive targets beyond the mentioned level, with potential objectives at 144.00, followed by 145.05.

Consequently, we maintain our outlook for a bullish trend in the upcoming period, anticipating favorable momentum to drive the price towards the expected targets. It is essential to emphasize that sustaining above 141.40 is crucial to ensure the continuity of the bullish wave.

For today's trading, we anticipate the price to trade within the range of 142.00 support and 143.50 resistance.

USD/JPY - Trade Idea

Entry Price – Buy Above 142.269

Take Profit – 143.803

Stop Loss – 141.424

Risk to Reward – 1: 1.5

Profit & Loss Per Standard Lot = +$1534/ -$845

Profit & Loss Per Micro Lot = +$153/ -$84

Daily Price Outlook

The USD/JPY pair is witnessing renewed selling pressure, declining for the third consecutive session. During early European session, the pair is trading around 140.66 with -0.18% loss in 24 hours, just above the weekly low.

The US Dollar continues to retreat for the second day, contributing to the downward pressure on the USD/JPY pair. Conversely, the Japanese Yen experiences a slight boost from a positive business sentiment outlook in July, as indicated in Japan's monthly report. Additionally, Japan maintains its assessment of a moderate economic recovery.

On the international front, the International Monetary Fund (IMF) warns of higher inflation in Japan and urges the Bank of Japan (BoJ) to exit its easy-money policy. However, BoJ Governor Kazuo Ueda reaffirms the bank's commitment to an accommodative monetary stance and stable long-term yield rates under the yield curve control (YCC) policy. The risk-on sentiment further supports the USD/JPY pair by capping the safe-haven appeal of the JPY.

Traders are cautious and await the outcome of the important FOMC policy meeting, where a 25 bps interest rate hike is expected. However, there is skepticism regarding whether the US central bank will adopt a more dovish stance despite the robust economy. 

Market focus remains on the policy statement and Fed Chair Jerome Powell's press conference for clues about the future rate-hike path, which will impact on the USD price movement and offer fresh direction to the USD/JPY pair.

Following this event, investors' attention will shift to the two-day BoJ monetary policy meeting starting on Thursday. However, given the fundamental backdrop, caution is warranted before confirming the sustainability of the recent rebound from the nearly two-month low.

USD/JPY - Technical analysis

The USD/JPY pair is currently trading below the 141.40 level and is expected to face downward pressure in the upcoming sessions, targeting potential support levels at 140.40 and 139.17.

As a result, a bearish bias is suggested for today, contingent upon the price remaining stable below 141.40.

However, if the pair manages to breach this level, it could indicate a positive factor that may lead to a resumption of the main bullish trend and potentially achieve further gains up to 142.90.

The anticipated trading range for today is projected to be between the support level at 140.30 and the resistance level at 141.80.

Daily Price Outlook

The USD/JPY has experienced a decline from 145.06 to a low of 138.75 so far today, with the next target being the 137.90 level, which has transitioned from resistance to support. The pair remains below 139.00, holding onto mild losses, and is influenced by sluggish yields ahead of the release of US Retail Sales data.

  During the early hours of Tuesday in Europe, USD/JPY continued its downward trajectory, reaching an intraday low of 138.50. Consequently, in a relatively calm market environment, the pair retraces the corrective recovery seen after hitting a two-month low last Friday.

Despite mixed emotions surrounding the anticipated US Retail Sales and Industrial Production data for June, the return of Japanese traders from vacation did not dampen market volatility.

The recent weakness in the risk-sensitive USD/JPY pair reflects the market's cautious optimism as concerns over the US-China conflict have eased in response to recent efforts by Washington to improve relations with Beijing through regular visits.

The upcoming Fed rate hike in July and divergent concerns about the future actions of central banks worldwide continue to influence traders' sentiment towards the USD/JPY pair.

The USD/JPY pair is currently trading within a rising wedge pattern, as indicated on the chart. In order to establish a bearish momentum and resume the corrective downtrend, the price needs to break below the support line of this pattern at 138.50.

This would potentially push the price lower towards the initial targets at 137.35 and further extend to 135.55 upon surpassing the previous level.

Considering the negative readings from key technical indicators, we maintain our bearish outlook for the near future.

However, if the price manages to breach above 139.17, it would halt the current downward pressure and potentially lead to an attempt to regain the primary bullish trend.

For today's trading, the anticipated range is between support at 137.60 and resistance at 139.17.

Daily Price Outlook

The USD/JPY pair is currently trading within a rising wedge pattern, as indicated on the chart. In order to establish a bearish momentum and resume the corrective downtrend, the price needs to break below the support line of this pattern at 138.50.

This would potentially push the price lower towards the initial targets at 137.35 and further extend to 135.55 upon surpassing the previous level.

Considering the negative readings from key technical indicators, we maintain our bearish outlook for the near future.

However, if the price manages to breach above 139.17, it would halt the current downward pressure and potentially lead to an attempt to regain the primary bullish trend.

For today's trading, the anticipated range is between support at 137.60 and resistance at 139.17.

USD/JPY - Trade Idea

Entry Price – Sell Limit 138.969

Take Profit – 137.268

Stop Loss – 140.070

Risk to Reward – 1: 1.5

Profit & Loss Per Standard Lot = +$170/ -$110

Profit & Loss Per Micro Lot= +$17/ -$11

Daily Price Outlook

The USD/JPY pair experienced a strong support level at 137.35, leading to a noticeable upward rebound and a subsequent test of the key resistance level at 139.17.

However, it is worth mentioning that the price failed to break above this level and has started to show signs of consolidation.

This indicates a potential resumption of the correctional bearish trend in the upcoming sessions, with a target of revisiting the support at 137.35. Breaking below this level would further push the price towards the next correctional target at 135.55.

The current negative overlap of the stochastic indicator reinforces the likelihood of a resumption of negative trades today, supporting the overall bearish bias unless there is a breach of the resistance level at 139.17 and a sustained hold above it.

USD/JPY - Trade Idea

Entry Price – Sell Limit 138.969

Take Profit – 137.268

Stop Loss – 140.070

Risk to Reward – 1: 1.5

Profit & Loss Per Standard Lot = +$170/ -$110

Profit & Loss Per Micro Lot= +$17/ -$11