USDJPY Analysis
| Performance after Tuesday | |||||
| Period | Pct | Chg | Momentum | ||
| Tuesday | -0.87% | -124.7 Pips |  |
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| Week to-date | -1.18% | -171.1 Pips |  |
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| May | 0.18% | 25.7 Pips |  |
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Upcoming key events (London Time)
Wed 07:00 PM USD Fed Interest Rate Decision (Federal Funds Rate)
What happened lately
The American economy anticipates a significant event with the Federal Reserve’s interest rate decision scheduled for discussion. This event is highly impactful as it directly influences the monetary policy direction of the United States. The decision regarding Federal Funds Rate is a critical indicator of the Federal Reserve’s monetary policy stance. A change in the interest rate can affect various economic factors, including inflation, consumer spending, and overall economic growth. Hence, this meeting is keenly observed by market participants as it provides insights into future interest rate paths and economic conditions. Given the lack of additional major economic events, the focus remains sharply on this pivotal decision, which could result in shifts in economic strategies and impacts on financial markets.
The recent movement in the USDJPY currency pair saw a decline of -0.87%, with the rate settling at 142.45 on Tuesday. In the foreign exchange market, the USD’s strength and monetary policy expectations significantly influence the USDJPY rate. With the Federal Reserve’s interest rate decision scheduled, market participants might engage in speculative activities that impact currency valuations. Should the rate be increased or even just hinted to rise further, it may strengthen the USD, causing the USDJPY to move upward due to increased demand for the US currency. Conversely, if the decision reflects no change or a dovish outlook, the USD may weaken against the yen, leading to a potential decline in the USDJPY rate. Therefore, traders will closely watch any cue from the Federal Reserve to adjust their positions accordingly, making the upcoming event a crucial determinant for the USDJPY’s near-term movement.
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What can we expect from USDJPY today?
USDJPY on Tuesday dropped -0.87% to 142.45. Price is below 9-Day EMA while Stochastic is falling.
Updated daily direction for USDJPY looks bearish as the pair posted lower in Tuesday trading session.
Looking ahead for the day, immediate support level is at 141.78 (S1) with break below could see further selling pressure towards 141.1 (S2). To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 144.28 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 142.35 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 | 145.63 |
| R2 | 144.95 |
| R1 | 143.7 |
| Daily Pivot | 143.03 |
| S1 | 141.78 |
| S2 | 141.1 |
| S3 | 139.85 |