USDJPY Analysis
| Performance after Monday | |||||
| Period | Pct | Chg | Momentum | ||
| Monday | -0.1% | -15.1 Pips |  |
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| Week to-date | -0.1% | -15.8 Pips | |
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| February | -1.4% | -215.8 Pips | |
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Upcoming key events (London Time)
Tue 03:00 PM USD Federal Reserve Chair Jerome Powell testifies Wed 01:30 PM USD CPI Inflation Rate (12-mth) Wed 01:30 PM USD CPI Inflation Rate excluding Food and Energy sectors (12-mth)
What happened lately
The USDJPY pair experienced a marginal decline of 0.1% to 151.94 on Monday, primarily indicating a consolidation phase as market participants weigh current economic circumstances against forthcoming influential events. This minor shift suggests that the market is maintaining a cautious stance, awaiting significant economic data that could influence future movements. The current stagnation in the currency pair’s price is reflective of the anticipation leading up to critical announcements, indicating a period where traders are hesitant to make significant bets.
In the United States, all eyes are on the upcoming high-impact events, particularly those scheduled in the middle of the week. On Tuesday at 3:00 PM, Federal Reserve Chair Jerome Powell is set to testify, an event that historically causes fluctuations in currency markets due to his influence on economic policy direction. Following this, a significant focus will shift to Wednesday’s economic releases. At 1:30 PM, the Consumer Price Index (CPI) for the 12-month period, including a version excluding the volatile food and energy sectors, will be published. These releases are vital as they provide insights into inflationary pressures within the U.S. economy, directly influencing the Federal Reserve’s monetary policy trajectory.
The pending testimonies and data have the potential to significantly impact the USDJPY pair. If the inflation figures indicate higher-than-expected inflation, it could increase expectations for a tighter Federal Reserve policy, potentially strengthening the U.S. dollar against the yen. Conversely, weaker inflation data could lead to a softening of rate hike expectations, potentially weakening the dollar. Additionally, Powell’s testimony may offer forward guidance that could sway the market’s expectations on future interest rate paths, influencing USDJPY variability. Thus, traders are likely to remain vigilant, reacting to these events which could either end the current consolidation phase or continue to dictate the USDJPY’s directional trend.
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What can we expect from USDJPY today?
USDJPY on Monday dropped -0.1% to 151.94. Price is below 9-Day EMA while Stochastic is falling.
Updated daily direction for USDJPY looks mixed as the pair is likely to consolidate above 151.48 (S1).
Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 152.54 or trades above daily pivot 152.01. While to the downside, the daily low of 151.56 and 151.48 (S1) as immediate support levels. USDJPY need to break on either side to indicate a short-term bias. A close below 151.56 would indicate selling pressure.
For the week to-date, take note that USDJPY is mixed as compared to prior week.
Key levels to watch out:
| R3 | 153.44 |
| R2 | 152.99 |
| R1 | 152.46 |
| Daily Pivot | 152.01 |
| S1 | 151.48 |
| S2 | 151.03 |
| S3 | 150.5 |