USDJPY Analysis
| Performance after Tuesday | |||||
| Period | Pct | Chg | Momentum | ||
| Tuesday | 0.11% | 16.6 Pips |  |
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| Week to-date | -0.15% | -23.9 Pips |  |
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| January | -0.95% | -148.999 Pips | |
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Upcoming key events (London Time)
Wed 07:00 PM USD Fed Interest Rate Decision (Federal Funds Rate) Thu 01:30 PM USD GDP annual rate
What happened lately
In the United States, the economic data for November and December reveal some downturns in key indices. The U.S. House Price Index for November saw a decline to 0.3%, decreasing from 0.4% in October, according to the Federal Housing Finance Agency (FHFA). This reduction indicates a slight cooling off in the housing market, potentially affecting consumer wealth and spending. Additionally, U.S. durable goods new orders in December decreased to -2.2%, a significant drop compared to the revised figure of -1.1% for November. However, durable goods orders excluding transportation rose by 0.3% in December, rebounding from a revised decrease in November, suggesting some resilience in segments unaffected by transportation. There was also observed a decline in nondefense capital goods orders excluding aircraft, which fell to 0.5% in December from a revised 0.9%. On a positive note, new-home sales in the U.S. increased by 3.6% in December despite a slower growth rate compared to November’s 5.9% increase.
The U.S economic indicators suggest a mixed outlook with concerns about durable goods orders and a slight slowdown in housing price increases. These factors hint at potential economic cooling, raising concerns over the U.S. economic momentum as the Federal Reserve is set to announce its Interest Rate Decision. Such economic uncertainty and anticipation regarding the Federal Funds Rate can impact the currency exchange markets, particularly the USDJPY pair. Given the data, there is a likelihood of cautious trading behavior among investors. If the Federal Reserve holds or cuts interest rates, the USD could weaken against the Japanese Yen, as investors may turn to safer assets or currencies. Conversely, if the rate is increased, it may boost the USD, strengthening against the Yen. Thus, upcoming U.S. economic data releases and Fed decisions will be critical in determining the USD’s movement against the JPY in the forex market.
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What can we expect from USDJPY today?
USDJPY on Tuesday rose 0.11% to 155.50. Price is below 9-Day EMA while Stochastic is falling.
Updated daily direction for USDJPY looks bullish as the pair ended higher after Tuesday trading session.
Looking ahead for the day, immediate upside resistance level is R1 at 156.06 with break above could target R2 at 156.61. While towards the downside, we are looking at daily low of 154.79 as an important support. Break below this level could weaken the current bullish momentum. A break above 155.98 would suggest bullish bias after recent positive movement.
For the week to-date, take note that USDJPY is mixed as compared to prior week.
Key levels to watch out:
| R3 | 157.24 |
| R2 | 156.61 |
| R1 | 156.06 |
| Daily Pivot | 155.43 |
| S1 | 154.87 |
| S2 | 154.24 |
| S3 | 153.69 |