As the USD continues to weaken, USD/JPY faces downward pressure, according to leading OCBC FX strategists Frances Cheung and Christopher Wong.
Key Factors Driving USD/JPY Lower
Recent developments, such as the BoJ Governor’s reaffirmation of potential interest rate hikes and shifts in Fed-BoJ policies, are contributing to the decline in USD/JPY. This is expected to lead to a narrowing of UST-JGB yield differentials, further impacting the currency pair’s trajectory.
Currently trading at 143.53, the pair is experiencing fading bullish momentum on the daily chart, with RSI indicating a downward trend. Sideways trading is anticipated, with support levels at 143.45 and 142, and resistance at 145.90 and 147.20.
Expert Analysis and Forecast
Based on the latest market trends and policy shifts, it is crucial for investors to closely monitor USD/JPY movements. The potential for further downside in the pair suggests caution for traders looking to enter the market.
Conclusion
In conclusion, the weakening of the USD and policy shifts by central banks are key drivers behind the downward pressure on USD/JPY. Understanding these factors and their implications on currency pairs can help investors make informed decisions and navigate the ever-changing financial markets.