USD/JPY Price Analysis – Oct 24, 2024
Daily Price Outlook
The USD/JPY pair has been on a bearish trend recently, influenced by several factors. The Japanese Yen (JPY) has gained strength, while the US Dollar (USD) has weakened slightly. This came after Japanese officials made verbal interventions, expressing concerns over the Yen's rapid depreciation.
This prompted some buyers to turn to the Yen, which, along with a modest decline in the USD, pushed the USD/JPY pair down to around 152.00. Fears of government intervention to stabilize the Yen further fueled this downward movement in the USD/JPY pair.
Japanese Yen Edges Higher After Verbal Intervention and BoJ Rate-Hike Uncertainty
The Japanese Yen's recent rise has been influenced by verbal intervention from Finance Minister Katsunobu Kato, who voiced concerns about one-sided currency movements. Additionally, Deputy Chief Cabinet Secretary Kazuhiko Aoki emphasized that the government is closely monitoring foreign exchange fluctuations.
However, uncertainty surrounding the Bank of Japan's (BoJ) interest rate hike decisions looms large, especially with the general election approaching on October 27.
Recent opinion polls indicate that the ruling Liberal Democratic Party (LDP) may lose its majority, raising doubts about the BoJ's ability to continue raising rates. This uncertainty is limiting the Yen's recovery, preventing it from gaining significant ground and creating mixed sentiment in the USD/JPY pair.
Support for the US Dollar Amid Fed Expectations and Economic Data Insights
On the other hand, expectations of a less aggressive approach from the Federal Reserve (Fed) are providing some support to the US Dollar. Market participants expect the Fed to implement modest rate cuts over the coming year, especially after the US election.
This view, combined with concerns over increased deficit spending under a new US administration, has driven US bond yields higher, limiting the downside for the USD. As a result, this has helped prevent further declines in the USD/JPY pair.
Traders are now awaiting fresh economic data, particularly the release of flash US PMI prints, which will influence USD price dynamics and likely set the short-term direction for the USD/JPY. Additionally, stability in the equity markets could lead to dip-buying, helping to stabilize the pair. (edited)
USD/JPY – Technical Analysis
USD/JPY is currently trading at 152.151, down 0.39% during the session, signaling potential bearish momentum. The pair is approaching its pivot point at 152.575, indicating that traders are eyeing key support and resistance levels closely.
Immediate resistance lies at 153.180, with further upside potential at 153.698 if USD/JPY gains strength. However, the current downward pressure suggests that a retest of key support levels is more likely. Immediate support is seen at 151.908, with stronger support at 151.601 and a deeper level at 151.171.
The technical indicators present a mixed picture. The Relative Strength Index (RSI) stands at 56, suggesting that the pair is in a neutral range, although slightly favoring sellers. Additionally, the 50-day Exponential Moving Average (EMA) is positioned at 150.911, providing a lower boundary that could act as strong support should the pair continue to fall.
With USD/JPY trading near the 152.300 level, a sell entry could be considered, aiming for a take-profit level at 151.600. Traders should set a stop-loss at 152.950 to manage risks effectively if the pair reverses direction.
USD/JPY faces immediate bearish pressure, with a key sell entry below 152.300. Traders should watch for potential downside toward 151.600, while resistance at 153.180 could limit any rebound.
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