- USD/JPY traded with mild losses in a narrow range on Monday and closed at 146.40.
- The USD was one of the session's worst performers, with the JPY being the weakest.
- Investors turned their focus to ISM Services PMI for fresh catalysts.
At the start of the week, the USD/JPY saw little movement, with both currencies trading weak against most of their rivals. The USD traded soft after last week's key events. Nonfarm Payrolls showed a mixed picture, while the ISM Manufacturing PMI rose higher than expected and the Core Personal Consumption Expenditures came in hot. Focus now shifts to Service sector PMI surveys from the ISM to be released on Wednesday, which will help investors to continue modelling their expectations regarding the next Federal Reserve (Fed) decisions.
The USD is trading soft on Monday after last week's key events. Nonfarm Payrolls showed a mixed picture, while the August ISM Manufacturing PMI rose higher than expected as well as the Core Personal Consumption Expenditures from July. Focus now shifts to Service sector PMI surveys from the ISM to be released on Wednesday, which will help investors to continue modelling their expectations regarding the next Federal Reserve (Fed) decisions.
According to the CME FedWatch tool, the odds of an extra 0.25% tightening throughout the period leading to the December meeting had somewhat eased, but investors are still placing some bets on it. If the Fed opts for another hike, it would lift rates to 5.75%.
On the Yen’s side, local wage and inflation data will play a pivotal role in the Bank of Japan’s (BoJ) considerations for potential adjustments to monetary policy. In that sense, at the early Asian session on Thursday, Japan will report household spending and earnings figures from July, and their outcome will influence the expectations of the following BoJ decisions.
USD/JPY Levels to watch
Analysing the daily chart, the USD/JPY technical outlook is bullish in the short term. The Relative Strength Index (RSI) is positioned above its midline in positive territory. It has a northward slope, indicating a favourable buying momentum. It is further supported by the positive signal from the Moving Average Convergence Divergence (MACD), which displays green bars, underscoring the growing bullish momentum. Also, the pair is above the 20,100,200-day Simple Moving Average (SMA), indicating a favourable position for the bulls in the bigger picture.
Support levels: 145.72 (20-day SMA), 145.00, 144.00.
Resistance levels: 146.80, 147.00, 147.40.
USD/JPY Daily Chart
-638294604806512018.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD hovers around 1.0850 as US Dollar stabilizes
EUR/USD is trading sideways at around 1.0850 in European trading on Monday. A lack of fresh fundamental catalysts and holiday-thinned market conditions leave the pair oscillating in a tight range.
GBP/USD keeps range near 1.2750 amid holiday-thinned trading
GBP/USD is trading modestly flat, keeping its range near 1.2750 in the European morning on Monday. The pair is subject to thin liquidity and minimal volatility, courtesy of US and UK market holidays.
Gold price edges higher, Israel strikes Rafah and boosts safe-haven flows
Gold price (XAU/USD) gathers strength on Monday. The softer US Dollar (USD) and the renewed escalating geopolitical tensions in the Middle East provide some support to the yellow metal.
BTC/USD appears poised for further outperformance
Last week was another positive for BTC/USD, which was up +1.9% as of London’s close on Friday despite finishing considerably off its best levels. Price movement on the weekly timeframe has been working between the limits of a potential bullish flag pattern.
Final full week of May welcomes updated inflation data
Monday will likely be a snoozer, with US and UK banks closing in observance of Bank Holidays. The majority of focus this week will fall on Friday’s US PCE inflation for April, alongside personal income and spending.