USD/JPY Price Analysis: Trends upward for third-straight day, buyers eye 162.00


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  • USD/JPY
    gains
    over
    0.30%,
    buoyed
    by
    Powell’s
    stance
    against
    rate
    cuts
    without
    clear
    disinflation.

  • Technicals
    hint
    at
    resistance
    near
    the
    162.00
    mark;
    RSI
    approaches
    overbought
    territory.

  • Support
    levels
    to
    monitor:
    161.10
    (Tenkan-Sen),
    160.73
    (July
    9
    low),
    160.26
    (July
    8
    low)
    if
    bears
    take
    over.

The

USD/JPY

stretched
its
advance
to
three
consecutive
days
and
registered
gains
of
more
than
0.30%
due
to
Fed
Chair
Jerome
Powell
sticking
to
the
script.
He
said
that
lowering
the

fed

funds
rate
is
not
an
option
unless
there
is
progress
in
the
disinflation
process.
The
pair
trades
at
161.77,
approaching
the
year-to-date
(YTD)
high
of
161.95.

USD/JPY
Price
Analysis:
Technical
outlook

From
a
technical
standpoint,
the
USD/JPY
uptrend
remains
intact,
though
sellers
could
emerge
at
around
the
psychological
162.00
resistance
level.

The
momentum
indicates
a
buyer-dominated
market;
the
Relative
Strength
Index
(RSI)
hovers
near
overbought
conditions.
This
could
hinder
the
bulls’
drive
to
lift
the
USD/JPY
exchange
rate
or
pave
the
way
for
consolidation.

If
USD/JPY
decisively
clears
162.00,
the
next
resistance
would
be
163.00,
and
the
November
1986
high
of
164.87.

Conversely,
if
bears
stepped
in
and
dragged
prices
below
the
Tekan-Sen
at
161.10,
it
could
exacerbate
a
deeper
pullback.
The
next
support
would
be
the
July
9
low
of
160.73,
followed
by
the
latest
cycle
low
of
July
8
low
of
160.26.
If
those
two
levels
are
surpassed,
the
USD/JPY
could
be
set
for
a
drop
to
160.00
and
below.

USD/JPY
Price
Action

Daily
Chart


Japanese
Yen
FAQs

The
Japanese
Yen
(JPY)
is
one
of
the
world’s
most
traded
currencies.
Its
value
is
broadly
determined
by
the
performance
of
the
Japanese
economy,
but
more
specifically
by
the
Bank
of
Japan’s
policy,
the
differential
between
Japanese
and
US
bond
yields,
or
risk
sentiment
among
traders,
among
other
factors.

One
of
the
Bank
of
Japan’s
mandates
is
currency
control,
so
its
moves
are
key
for
the
Yen.
The
BoJ
has
directly
intervened
in
currency
markets
sometimes,
generally
to
lower
the
value
of
the
Yen,
although
it
refrains
from
doing
it
often
due
to
political
concerns
of
its
main
trading
partners.
The
current
BoJ
ultra-loose
monetary
policy,
based
on
massive
stimulus
to
the
economy,
has
caused
the
Yen
to
depreciate
against
its
main
currency
peers.
This
process
has
exacerbated
more
recently
due
to
an
increasing
policy
divergence
between
the
Bank
of
Japan
and
other
main
central
banks,
which
have
opted
to
increase
interest
rates
sharply
to
fight
decades-high
levels
of
inflation.

The
BoJ’s
stance
of
sticking
to
ultra-loose
monetary
policy
has
led
to
a
widening
policy
divergence
with
other
central
banks,
particularly
with
the
US
Federal
Reserve.
This
supports
a
widening
of
the
differential
between
the
10-year
US
and
Japanese
bonds,
which
favors
the
US
Dollar
against
the
Japanese
Yen.

The
Japanese
Yen
is
often
seen
as
a
safe-haven
investment.
This
means
that
in
times
of
market
stress,
investors
are
more
likely
to
put
their
money
in
the
Japanese
currency
due
to
its
supposed
reliability
and
stability.
Turbulent
times
are
likely
to
strengthen
the
Yen’s
value
against
other
currencies
seen
as
more
risky
to
invest
in.