- The likelihood of a 50 basis point Fed rate cut in September fell due to better-than-expected data.
- This week, traders will be watching the Jackson Hole Symposium.
- Bank of Japan Governor Kazuo Ueda will speak on Friday.
USD/JPI forecast points to solid bearish momentum as Yen rises on divergence in BOJ-Fed policy outlook. Fed policymakers are likely to take a more dovish tone and support expectations for a rate cut in September. On the other hand, BoJ policymakers have taken a hawkish tone, which could indicate that more rate hikes are on the way.
-Are you interested in learning more about the Forex Signal Telegram Group? Click here for details –
The yen has strengthened since Friday as expectations of a Fed rate cut rose. At the same time, investors profited from the recent dollar rally, weakening the greenback. Last week, the likelihood of a 50 basis point Fed rate cut in September fell due to better-than-expected data. However, the minor cut has increased. Markets are currently fully pricing in a 25 basis point rate cut in September. While the rate cut cycle could be gradual, it is likely to begin next month. Consequently, the dollar could remain fragile.
This week, traders will be watching the Jackson Hole Symposium, during which Powell may hint at Fed policy. Experts believe that the Fed chairman could signal the start of interest rate cuts in September. At the same time, the minutes from the FOMC’s policy meeting will show what went into the latest decision to hold interest rates.
Meanwhile, in Japan, the central bank has started raising interest rates and may do so again. Bank of Japan Governor Kazuo Ueda will speak on Friday. The hawkish tone will further emphasize the differences in political views between Japan and the US.
USD/JPI Key Events Today
Traders are not expecting big economic data from the US or Japan. Accordingly, the pair could extend last week’s move.
USD/JPI Technical Forecast: Bearish turn puts 142.56 in bear’s eyes
On the technical side, the USD/JPI price has broken below the 30-SMA, indicating a change in bearish sentiment. At the same time, the price fell below its bullish trend line and the 0.382 Fib level. In the previous move, the bulls set their target at the resistance level of 150.03 and 0.618 Fib. However, before the price got there, there was a shock move that saw the bears take over.
-If you are interested in Forex day trading, please read our getting started guide-
The RSI is now trading below 50, supporting bearish momentum. Therefore, the price could continue to fall towards the support level of 142.56.
Do you want to trade Forex now? Invest in eToro!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing money.
