Technical Analysis

USD/JPY Price Analysis – July 11, 2024

By LonghornFX Technical Analysis
Jul 11, 2024
Usdjpy

Daily Price Outlook

During the European trading session, the USD/JPY currency pair has been experiencing a bearish trend, extending its losses for the third consecutive day. This decline is primarily driven by traders' cautious stance ahead of the upcoming release of the US Consumer Price Index (CPI) data for June, scheduled for Thursday.

The CPI data is crucial as it will provide more clarity on the Federal Reserve's future monetary policy direction. Additionally, recent remarks by Fed Chair Jerome Powell, emphasizing the need to monitor the deteriorating labor market, have contributed to the uncertainty and downward pressure on the USD/JPY pair.

Another factor supporting the Japanese Yen (JPY) and contributing to the weakness of the USD/JPY pair is the rising speculation that the Bank of Japan (BoJ) may raise interest rates in its upcoming July meeting.

This speculation has bolstered the JPY, limiting its downside and adding to the bearish sentiment surrounding the USD/JPY pair.

Stability of the Japanese Government's 10-Year JGB Yield and Its Impact on USD/JPY Pair

On the JPY pair, the Japanese government's 10-year Japanese Government Bond (JGB) yield has remained stable at approximately 1.09%, close to its recent high of 1.10% recorded on July 3.

This stability has come amidst selling pressure on Japanese government bonds, reflecting overseas investors' anticipation that the BoJ may raise interest rates in response to the weakening Japanese Yen. The stability in JGB yields supports the JPY, contributing to the downward trend of the USD/JPY pair.

Furthermore, the BoJ is reportedly considering trimming this year's economic growth forecast and projecting that inflation will stay around its 2% target in the coming years.

This consideration, coupled with the BoJ's ongoing in-person meetings with banks and financial institutions to assess a feasible pace for scaling back its JGB purchases, has further influenced the market's expectations and supported the JPY.

Impact of Anticipated Fed Rate Cuts and Easing CPI Data on USD/JPY Pair

On the US front, the overall strength of the US dollar continues to decline, reflecting growing expectations that the Federal Reserve will begin cutting interest rates starting in September, possibly followed by more cuts in December.

Recent statements from Fed Chair Jerome Powell have reinforced this outlook, emphasizing the Fed's goal of keeping prices stable and considering a shift to neutral interest rates by late 2024 as inflation trends develop. Despite noting signs of economic slowdown,

On the data front, the headline Consumer Price Index (CPI) is anticipated to have risen by 0.1% in June, marking a slight easing in the annual rate from 3.3% to 3.1%. Meanwhile, Core CPI, which excludes Food and Energy prices, is expected to maintain a steady year-over-year rate of 3.4%.

The anticipation of Fed interest rate cuts starting in September and easing US CPI data has weakened the USD, contributing to the bearish trend of the USD/JPY pair.

USD/JPY Price Chart - Source: Tradingview
USD/JPY Price Chart - Source: Tradingview

USD/JPY - Technical Analysis

The Japanese yen is experiencing a brief respite from its recent slide against the U.S. dollar, with USD/JPY trading down slightly at 161.705. The 4-hour chart paints a cautious picture, with the pair hovering just below a pivotal resistance level at 162.1200.

This level is a key battleground for bulls and bears alike, and a decisive break above could signal a resumption of the dollar's upward trajectory, with potential targets at 162.3800 and 162.7310.

However, the 50-day Exponential Moving Average (EMA) at 161.1100 is acting as a significant support zone. A failure to break above the pivot point could see the pair retreating towards this EMA, potentially even further down to the support levels at 160.7320 and 160.2550.

The Relative Strength Index (RSI) reading of 62 suggests the pair is not yet overbought, leaving room for further upside if buyers regain control.

Given the current technical setup, traders are advised to approach with caution. A prudent strategy would be to wait for a confirmed break above 162.1200 before initiating long positions.

Alternatively, aggressive traders could consider buying above 161.470, with a stop-loss order placed below 161.184. The initial target for profit-taking would be the pivot point at 162.120.

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USD/JPY

Daily Trade Ideas

USD/JPY Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Jul 11, 2024
Usdjpy

Daily Price Outlook

- USD/JPY faces key resistance at 162.1200, a break above which could accelerate the uptrend.

- The 50-day EMA at 161.1100 provides a crucial support level to watch.

- The RSI indicates potential for further upside, but traders should remain vigilant for signs of reversal.

The Japanese yen is experiencing a brief respite from its recent slide against the U.S. dollar, with USD/JPY trading down slightly at 161.705. The 4-hour chart paints a cautious picture, with the pair hovering just below a pivotal resistance level at 162.1200.

This level is a key battleground for bulls and bears alike, and a decisive break above could signal a resumption of the dollar's upward trajectory, with potential targets at 162.3800 and 162.7310.

However, the 50-day Exponential Moving Average (EMA) at 161.1100 is acting as a significant support zone.

A failure to break above the pivot point could see the pair retreating towards this EMA, potentially even further down to the support levels at 160.7320 and 160.2550. The Relative Strength Index (RSI) reading of 62 suggests the pair is not yet overbought, leaving room for further upside if buyers regain control.

Given the current technical setup, traders are advised to approach with caution. A prudent strategy would be to wait for a confirmed break above 162.1200 before initiating long positions.

Alternatively, aggressive traders could consider buying above 161.470, with a stop-loss order placed below 161.184. The initial target for profit-taking would be the pivot point at 162.120.

USD/JPY Price Chart - Source: Tradingview
USD/JPY Price Chart - Source: Tradingview

USD/JPY - Trade Ideas

Entry Price – Buy Above 161.470

Take Profit – 162.120

Stop Loss – 161.184

Risk to Reward – 1: 2

Profit & Loss Per Standard Lot = +$650/ -$286

Profit & Loss Per Mini Lot = +$65/ -$28

USD/JPY

Daily Trade Ideas

USD/JPY Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Jul 4, 2024
Usdjpy

Daily Price Outlook

- USD/JPY trading at $161.379, down 0.11%; pivot point at $161.1430 could signal reversal or continuation.

- RSI at 53 indicates a neutral stance; potential bearish correction if resistance at $161.9460, $162.3800, $162.8150 holds.

- 50 EMA at $160.7320 indicates bullish trend; a break above $161.154 may trigger buying with targets at $161.945.

The USD/JPY pair is currently trading at $161.379, experiencing a slight decline of 0.11% in early trading. On the 4-hour chart, pivotal technical levels are clearly outlined. The pivot point is established at $161.1430, which could serve as a significant threshold for determining the market's direction today.

Immediate resistance levels are noted at $161.9460, $162.3800, and $162.8150. A break above these resistance points might signal further upward momentum, potentially leading to new highs.

Conversely, immediate support is identified at $160.7830, with further support levels at $160.2900 and $159.8800. These levels could offer buying opportunities if the price continues to fall. The technical indicators present a mixed outlook.

The Relative Strength Index (RSI) is currently at 53, suggesting a relatively neutral stance but leaning slightly towards the bearish side due to the recent price drop.

The 50-day Exponential Moving Average (EMA) is positioned at $160.7320, indicating a bullish trend as long as the price remains above this level. The EMA acts as dynamic support, and a sustained price above this level would reinforce a bullish outlook.

Given the current market scenario, a prudent trading strategy would be to enter a long position if the price moves above $161.154. Setting a take-profit target at $161.945 aligns with immediate resistance levels, ensuring a favorable risk-reward ratio while capturing potential upward movement.

A stop-loss at $160.785, just below immediate support, helps mitigate risk from unexpected downward shifts.

USD/JPY Price Chart - Source: Tradingview
USD/JPY Price Chart - Source: Tradingview

USD/JPY - Trade Ideas

Entry Price – Buy Above 161.154

Take Profit – 161.945

Stop Loss – 160.785

Risk to Reward – 1: 2

Profit & Loss Per Standard Lot = +$791/ -$369

Profit & Loss Per Mini Lot = +$79/ -$36

USD/JPY

Technical Analysis

USD/JPY Price Analysis – July 03, 2024

By LonghornFX Technical Analysis
Jul 4, 2024
Usdjpy

Daily Price Outlook

During the European trading session, the USD/JPY pair continued its bearish trend and edged lower around the 161.31 level, hitting an intraday low of 161.14. The downward movement can be attributed to the weakening US dollar, which lost traction due to lackluster economic data, raising expectations of Fed rate cuts in 2024, and putting pressure on the currency.

Moreover, the prospect of FX intervention by Japanese authorities adds uncertainty to the pair's outlook. Traders will closely monitor economic indicators, central bank communications, and geopolitical developments for insights into the future direction of USD/JPY.

Impact of Dovish Fed and Economic Data on USD/JPY Pair

On the US front, recently released downbeat economic data have raised expectations that the Federal Reserve (Fed) might consider cutting interest rates in 2024. US Treasury yields have declined in response to these lackluster data releases, signaling reduced confidence in the economic outlook.

Fed Chair Jerome Powell's recent comments about the central bank's cautious approach towards inflation and the need for more evidence before adjusting rates have fueled market speculation. This dovish stance by the Fed has weighed on the US Dollar, contributing to its losses in the USD/JPY pair.

Impact of Japanese Intervention Speculation on USD/JPY Pair

On the BOJ front, the recent weakening of the Japanese Yen has raised concerns among policymakers about its potential impact on the economy.

As the Yen depreciates against the US Dollar (USD), it could increase import costs, potentially leading to higher inflation and reduced purchasing power for Japanese consumers. To counteract these effects, there is speculation that Japanese authorities may intervene in the currency markets.

This intervention could involve selling Yen and buying Dollars to stabilize the exchange rate. By doing so, they hope to maintain stable import prices, support consumer confidence, and mitigate any adverse economic impacts caused by a weakening Yen.

Therefore, the speculation of Japanese intervention to stabilize the Yen could impact the USD/JPY pair by potentially halting or reversing the Yen's depreciation trend against the US Dollar.

USD/JPY Price Chart - Source: Tradingview
USD/JPY Price Chart - Source: Tradingview

USD/JPY - Technical Analysis

The USD/JPY pair is currently trading at $161.379, experiencing a slight decline of 0.11% in early trading. On the 4-hour chart, pivotal technical levels are clearly outlined. The pivot point is established at $161.1430, which could serve as a significant threshold for determining the market's direction today.

Immediate resistance levels are noted at $161.9460, $162.3800, and $162.8150. A break above these resistance points might signal further upward momentum, potentially leading to new highs.

Conversely, immediate support is identified at $160.7830, with further support levels at $160.2900 and $159.8800. These levels could offer buying opportunities if the price continues to fall.

The technical indicators present a mixed outlook. The Relative Strength Index (RSI) is currently at 53, suggesting a relatively neutral stance but leaning slightly towards the bearish side due to the recent price drop.

The 50-day Exponential Moving Average (EMA) is positioned at $160.7320, indicating a bullish trend as long as the price remains above this level. The EMA acts as dynamic support, and a sustained price above this level would reinforce a bullish outlook.

Given the current market scenario, a prudent trading strategy would be to enter a long position if the price moves above $161.154. Setting a take-profit target at $161.945 aligns with immediate resistance levels, ensuring a favorable risk-reward ratio while capturing potential upward movement.

A stop-loss at $160.785, just below immediate support, helps mitigate risk from unexpected downward shifts.

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Technical Analysis

USD/JPY Price Analysis – June 27, 2024

By LonghornFX Technical Analysis
Jun 27, 2024
Usdjpy

Daily Price Outlook

During the European trading session, the USD/JPY pair continued its downward trend, remaining under pressure around the 110.47 level and hitting an intraday low of 110.30. The decline in USD/JPY can be attributed to several factors.

Firstly, Japanese authorities, notably Finance Minister Shunichi Suzuki, have verbally intervened, expressing readiness to intervene in the foreign exchange market to address excessive movements. This statement signals Japan's concern over the yen's strength and its potential impact on export competitiveness and economic stability.

Secondly, market sentiment towards the US dollar has been cautious ahead of key economic data releases, particularly the Core PCE Price Index. However, the expectations of a slight decrease in the year-over-year inflation rate could imply a less aggressive stance from the Fed regarding interest rate hikes, thereby dampening demand for the dollar.

Japanese Finance Minister Suzuki's Statements and Impact on USD/JPY Pair

Finance Minister Suzuki's comments highlight Japan's determination to stabilize currency markets by addressing excessive fluctuations. While Suzuki did not specify intervention thresholds, his statement prompted market participants to reassess their positions, temporarily pushing USD/JPY lower.

Japan's proactive approach suggests potential interventions if the yen strengthens further, which typically pressures USD/JPY as traders anticipate government measures.

This aggressive stance underscores Japan's commitment to mitigating currency volatility and supporting export competitiveness, aiming to maintain economic stability amid fluctuating global conditions.

Hence, the Finance Minister Suzuki's proactive stance to stabilize currency markets may temporarily push USD/JPY lower as markets anticipate potential yen-strengthening interventions, reflecting Japan's commitment to curbing volatility and supporting export competitiveness.

US Dollar Weakens on Fed Rate Cut Speculation

On the US front, the broad-based US dollar lost some of its strength and turned bearish, likely due to uncertainty over the timing and number of Fed rate cuts expected this year.

The Fed's projection of only one rate cut in 2024 contrasts with market expectations, which are currently pricing in a higher likelihood of the first rate cut occurring in September, followed by two additional 25 basis point cuts by the year-end. This downward pressure on the dollar contributed to losses in the USD/JPY pair.

Federal Reserve officials, including Governor Michelle Bowman and Governor Lisa Cook, have hinted at a cautious approach towards monetary policy, suggesting that while inflation concerns persist, they may not rush into rate hikes.

This stance could limit the downside for the US dollar, particularly against the yen, which tends to strengthen during periods of risk aversion.

Therefore, the uncertain timing and number of anticipated Fed rate cuts have weakened the US dollar, influencing a decline in the USD/JPY pair. Fed officials' cautious stance on monetary policy, amid ongoing inflation concerns, may mitigate further downside pressure on the pair.

USD/JPY Price Chart - Source: Tradingview
USD/JPY Price Chart - Source: Tradingview

USD/JPY - Technical Analysis

The USD/JPY pair is currently trading at $160.571, down 0.16% in the latest session. This decline is occurring despite the broader strength seen in the U.S. dollar, reflecting mixed sentiment in the currency market.

The 4-hour chart shows a critical pivot point at $160.33, which is pivotal in determining the market's short-term direction. Immediate resistance levels are found at $160.85 and $161.21, marking potential hurdles for any bullish advance.

The Relative Strength Index (RSI) stands at 64, indicating that the market is nearing overbought territory but still has some room for further gains. The 50-day Exponential Moving Average (EMA) at $159.80 is currently providing a supportive layer, reinforcing the overall bullish trend.

Given the current technical setup, a buy order above $160.337 is recommended, with a take profit target set at $160.992 and a stop loss at $160.016. USD/JPY remains bullish above the pivot point of $160.33.

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Daily Trade Ideas

USD/JPY Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Jun 27, 2024
Usdjpy

Daily Price Outlook

- USD/JPY is down 0.16%, trading at $160.571, indicating mixed market sentiment.

- Immediate resistance levels are at $160.85 and $161.21, with the pivot point at $160.33.

- RSI at 64 suggests nearing overbought conditions, while the 50-day EMA at $159.80 supports the bullish outlook.

The USD/JPY pair is currently trading at $160.571, down 0.16% in the latest session. This decline is occurring despite the broader strength seen in the U.S. dollar, reflecting mixed sentiment in the currency market.

The 4-hour chart shows a critical pivot point at $160.33, which is pivotal in determining the market's short-term direction. Immediate resistance levels are found at $160.85 and $161.21, marking potential hurdles for any bullish advance.

The Relative Strength Index (RSI) stands at 64, indicating that the market is nearing overbought territory but still has some room for further gains. The 50-day Exponential Moving Average (EMA) at $159.80 is currently providing a supportive layer, reinforcing the overall bullish trend.

Given the current technical setup, a buy order above $160.337 is recommended, with a take profit target set at $160.992 and a stop loss at $160.016. USD/JPY remains bullish above the pivot point of $160.33.

USD/JPY Price Chart - Source: Tradingview
USD/JPY Price Chart - Source: Tradingview

USD/JPY - Trade Ideas

Entry Price – Buy Above 160.337

Take Profit – 160.992

Stop Loss – 160.016

Risk to Reward – 1: 2

Profit & Loss Per Standard Lot = +$655/ -$321

Profit & Loss Per Mini Lot = +$65/ -$32

USD/JPY

Daily Trade Ideas

USD/JPY Price Analysis and Trade Forecast: Daily Trading Signal

By LonghornFX Technical Analysis
Jun 20, 2024
Usdjpy

Daily Price Outlook

- USD/JPY rises to $158.110, up 0.04%, indicating a bullish trend.

- Pivot point at $158.1940; key resistance at $158.5240, $158.8310, $159.1500.

- RSI at 61; 50 EMA at $157.3910 provides strong support.

The USD/JPY pair is currently trading at $158.110, reflecting a modest increase of 0.04%. The 4-hour chart outlines key technical levels that are crucial for traders to watch. The pivot point at $158.1940 is a significant marker for determining the next direction of price movement. Immediate resistance is noted at $158.5240, with further resistance levels at $158.8310 and $159.1500. These resistance points could pose challenges for the pair’s upward trajectory.

On the support side, immediate support is situated at $157.6190, followed by more substantial support levels at $157.1500 and $156.7300. These support levels are critical for preventing further declines in the USD/JPY pair.

Technical Indicators:

    The overall technical outlook suggests a bullish sentiment above the pivot point of $158.1940.

    For traders looking to capitalize on the current trend, an entry price above $158.245 is recommended. The take profit level is set at $158.800, with a stop loss at $157.800 to manage potential risks.

    USD/JPY Price Chart - Source: Tradingview
    USD/JPY Price Chart - Source: Tradingview

    USD/JPY - Trade Ideas

    Entry Price – Buy Stop 158.245

    Take Profit – 158.800

    Stop Loss – 157.800

    Risk to Reward – 1: 1.25

    Profit & Loss Per Standard Lot = +$555/ -$445

    Profit & Loss Per Mini Lot = +$55/ -$44

    USD/JPY

    Technical Analysis

    USD/JPY Price Analysis – June 20, 2024

    By LonghornFX Technical Analysis
    Jun 20, 2024
    Usdjpy

    Daily Price Outlook

    During the European trading session, the USD/JPY currency pair has showed a bullish trend and remained well bid around the 158.44 mark, hitting the intra-day high of 158.51 level. However, the bullish sentiment is primarily driven by several factors including the Bank of Japan's conservative stance, evident in its decision to delay tapering Japanese Government Bond purchases. This move suggests prolonged accommodative monetary policy, reducing confidence in the Yen and bolstering the Dollar's position against it in currency markets.

    Furthermore, the global equity markets' upbeat mood has contributed to diminishing demand for safe-haven assets like the Japanese Yen. As investors seek higher returns in riskier assets, the allure of the Yen as a safe-haven diminishes, further supporting the bullish case for the USD/JPY pair.

    BoJ’s Cautious Approach and the Upbeat Market Mood Undermine the Safe-Haven JPY and Its Impact on USD/JPY Pair

    On the BOJ front, the Bank of Japan's cautious strategy regarding tapering asset purchases has significant implications for the USD/JPY pair. By postponing discussions on reducing stimulus, the BoJ indicates a commitment to keeping monetary policy accommodative, which typically weakens the Japanese Yen. This diminishes the Yen's status as a safe-haven currency, prompting investors to favor higher-yield assets and riskier investments instead.

    Moreover, the upbeat mood in global equity markets further undermines the demand for the safe-haven JPY. Investors, seeking higher returns, move away from safe assets like the Yen towards currencies linked to economic growth, such as the US Dollar. This shift supports the USD/JPY pair's upward trend, indicating a preference for riskier investments over safe havens.

    Fed Rate-Cut Uncertainty Keeps the USD Bulls on the Defensive and Caps Gains for the Major and Its Impact on USD/JPY Pair

    Despite the USD/JPY pair's bullish momentum, uncertainties surrounding Federal Reserve policy decisions regarding interest rates have tempered the US Dollar's strength. The market sentiment anticipates potential rate cuts by the Fed amidst signs of subsiding inflation and economic uncertainties. This cautious stance by the Fed keeps USD bulls on the defensive, limiting the extent of gains for the USD/JPY pair.

    Investors closely monitor Federal Reserve communications and economic indicators for clues about future monetary policy actions. Speculations of multiple rate cuts this year suggest a less aggressive outlook for the US Dollar, contrasting with the more accommodative stance of other central banks, including the BoJ.

    This divergence in monetary policy expectations influences investor sentiment and contributes to volatility in the USD/JPY pair, as market participants adjust their positions based on evolving economic data and central bank rhetoric.

    USD/JPY Price Chart - Source: Tradingview
    USD/JPY Price Chart - Source: Tradingview

    USD/JPY - Technical Analysis

    The USD/JPY pair is currently trading at $158.110, reflecting a modest increase of 0.04%. The 4-hour chart outlines key technical levels that are crucial for traders to watch. The pivot point at $158.1940 is a significant marker for determining the next direction of price movement. Immediate resistance is noted at $158.5240, with further resistance levels at $158.8310 and $159.1500. These resistance points could pose challenges for the pair’s upward trajectory.

    On the support side, immediate support is situated at $157.6190, followed by more substantial support levels at $157.1500 and $156.7300. These support levels are critical for preventing further declines in the USD/JPY pair.

    Technical Indicators:

      The overall technical outlook suggests a bullish sentiment above the pivot point of $158.1940.

      For traders looking to capitalize on the current trend, an entry price above $158.245 is recommended. The take profit level is set at $158.800, with a stop loss at $157.800 to manage potential risks.

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      USD/JPY

      Daily Trade Ideas

      USD/JPY Price Analysis and Trade Forecast: Daily Trading Signal

      By LonghornFX Technical Analysis
      Jun 13, 2024
      Usdjpy

      Daily Price Outlook

      - USD/JPY trading at $157.20, up 0.24%, nearing critical resistance levels.

      - Immediate resistance at $157.41, with support at $156.31 indicating potential for upward momentum.

      - RSI at 55 and 50 EMA at $156.40 support a bullish outlook.

      The USD/JPY pair is currently trading at $157.20, showing a modest gain of 0.24%. This upward momentum is notable as the pair edges closer to critical resistance levels. The pivot point to monitor stands at $157.72, a crucial level that could influence future price movements.

      Immediate resistance is identified at $157.41, with subsequent resistances at $157.91 and $158.43, indicating potential targets for bullish traders. On the downside, immediate support is found at $156.31, followed by additional supports at $155.79 and $155.11. These levels are significant as they highlight areas where buying interest might emerge to stabilize the price.

      The Relative Strength Index (RSI) is at 55, suggesting a neutral to slightly bullish sentiment. The 50-day Exponential Moving Average (EMA) is positioned at $156.40, with the current price trading above this level, reinforcing the bullish outlook.

      Technical indicators point towards a bullish trend as long as the price remains above the pivot point of $157.72.

      In conclusion, the technical outlook for USD/JPY remains bullish above the pivot point of $157.72. Traders may consider a buy limit order at $156.765, aiming for a take profit level at $157.723. A stop loss should be placed at $156.305 to mitigate risk effectively.

      USD/JPY Price Chart - Source: Tradingview
      USD/JPY Price Chart - Source: Tradingview

      USD/JPY - Trade Ideas

      Entry Price – Buy Limit 156.765

      Take Profit – 157.723

      Stop Loss – 156.305

      Risk to Reward – 1: 2

      Profit & Loss Per Standard Lot = +$958/ -$460

      Profit & Loss Per Mini Lot = +$95/ -$46

      USD/JPY

      Technical Analysis

      USD/JPY Price Analysis – June 13, 2024

      By LonghornFX Technical Analysis
      Jun 13, 2024
      Usdjpy

      Daily Price Outlook

      The USD/JPY currency pair has maintained its upward momentum and remained well bid around 157.09, hitting the intra-day high of 157.35 level. However, the upward trend was primarily driven by strength in the US Dollar.

      The bullish trend in the USD can be attributed to the Federal Reserve's unexpectedly hawkish stance following its recent policy meeting. The Fed revised its projections, signaling a reduced likelihood of rate cuts this year due to expectations of higher inflation.

      Fed’s Hawkish Outlook Supports USD/JPY Amid Soft US CPI

      On the US front, the Federal Reserve's hawkish outlook has played a major role in supporting the USD/JPY pair. The hawkish stance overshadowing softer-than-expected US Consumer Price Index (CPI) data released recently.

      The US CPI figures for May showed no change month-over-month and a slight decrease in the yearly rate to 3.3% from 3.4% in April. Moreover, the core CPI, excluding volatile food and energy prices, dropped to 3.4%, marking its lowest level in over three years.

      Despite modest US Consumer Price Index (CPI) figures, the Fed's confidence has bolstered market expectations of a robust US economy and the possibility of future interest rate hikes. This positive sentiment has favored the USD over the Japanese Yen, contributing to the upward trend in the USD/JPY exchange rate.

      Traders Await BoJ Decision Amid Reluctance in USD/JPY Directional Bets

      Looking ahead, traders are exercising caution and hesitating to place significant directional bets on the USD/JPY pair as they await the outcome of the Bank of Japan (BoJ) policy meeting.

      This decision is crucial because there's speculation that the bank might change how it handles its monetary policy, especially in terms of buying government bonds. Such changes could significantly affect the currency pair's direction in the market.

      Meanwhile, the uncertainty surrounding the BoJ's stance stems from Japan's economic challenges, including sluggish growth and persistent deflationary pressures. Market participants are keenly watching for any signals that could impact the yen's safe-haven appeal and influence the USD/JPY pair. 

      USD/JPY  Price Chart - Source: Tradingview
      USD/JPY  Price Chart - Source: Tradingview

      USD/JPY - Technical Analysis

      The USD/JPY pair is currently trading at $157.20, showing a modest gain of 0.24%. This upward momentum is notable as the pair edges closer to critical resistance levels. The pivot point to monitor stands at $157.72, a crucial level that could influence future price movements.

      Immediate resistance is identified at $157.41, with subsequent resistances at $157.91 and $158.43, indicating potential targets for bullish traders. On the downside, immediate support is found at $156.31, followed by additional supports at $155.79 and $155.11.

      These levels are significant as they highlight areas where buying interest might emerge to stabilize the price.

      The Relative Strength Index (RSI) is at 55, suggesting a neutral to slightly bullish sentiment. The 50-day Exponential Moving Average (EMA) is positioned at $156.40, with the current price trading above this level, reinforcing the bullish outlook.

      Technical indicators point towards a bullish trend as long as the price remains above the pivot point of $157.72.

      In conclusion, the technical outlook for USD/JPY remains bullish above the pivot point of $157.72. Traders may consider a buy limit order at $156.765, aiming for a take profit level at $157.723. A stop loss should be placed at $156.305 to mitigate risk effectively.

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