The USD/JPY pair is experiencing significant selling pressure, dropping to a nearly two-week low around the 145.25 region. The continuous decline in the US Dollar is attributed to speculations that the Federal Reserve will initiate a rate-cutting cycle soon due to cooling inflation. This expectation has led to a decrease in US Treasury bond yields and a drop in the USD Index (DXY) to its lowest point since January.
Despite positive US macro data such as Retail Sales and Jobless Claims beating estimates, the USD remains weak. On the other hand, the Japanese Yen is attracting safe-haven flows due to geopolitical tensions in the Middle East and hawkish expectations from the Bank of Japan following a strong GDP report.
Looking ahead, market focus will be on the FOMC meeting minutes and Fed Chair Jerome Powell’s speech for insights on the rate-cut path. Additionally, BoJ Governor Kazuo Ueda’s comments in parliament may impact the USD/JPY pair. Technical analysis suggests a bearish outlook with resistance at 146.50 and support at 145.00 and 144.65 levels.
Analysis:
The USD/JPY pair is facing downward pressure due to expectations of a Fed rate cut and geopolitical tensions. While positive US data failed to support the USD, the JPY benefited from safe-haven flows. The upcoming FOMC meeting minutes and BoJ Governor’s remarks will be crucial for the pair’s movement. From a technical standpoint, resistance levels are at 146.50 and support levels at 145.00 and 144.65.
USD/JPY 1-hour chart
