The USD/JPY pair experienced a significant drop to a low of 146.41, reaching levels not seen since March, as a result of disappointing US economic data. This development has raised expectations for a potential rate cut by the Federal Reserve at the upcoming September meeting, leading to a sharp decline in the US 10-year Treasury bond yield. Currently, the pair is trading at 146.62, marking a decrease of over 1.80%.
Technical Analysis and Outlook for USD/JPY
Despite the downward trend, the USD/JPY pair faces a strong support level at 146.48, which could potentially lead to a reversal. If the price manages to break below this support, the next targets for sellers are 146.00, 145.50, and 145.00 levels.
The Relative Strength Index (RSI) indicates that the pair is oversold, hinting at a possible upward correction in the near future. For a bearish continuation, a daily close below 146.48 is crucial, with further support levels at 146.00 and 145.50.
On the other hand, if buyers regain control and push the price above 147.00, they could target the cycle low turned resistance at 151.86.
USD/JPY Price Action on the Daily Chart
Japanese Yen Strength Today
The table below illustrates the percentage change of the Japanese Yen (JPY) against major currencies today. Notably, the Japanese Yen showed strength against the US Dollar, marking a 1.88% increase.
Overall, the USD/JPY pair is facing significant pressure due to poor US economic data, leading to expectations of a Fed rate cut. Technical analysis suggests possible support levels and a potential upward correction. Traders and investors should closely monitor key levels and market dynamics to make informed decisions in this volatile environment.