USDJPY rises as markets await Federal Reserve Chair Powell’s testimony

USDJPY Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	0.04%	5.8 Pips
Week to-date	-0.09%	-12.5 Pips
June	1.32%	190.8 Pips

Upcoming key events (London Time)

Tue 03:00 PM USD Federal Reserve Chair Jerome Powell testifies

What happened lately

In the United States, there are no major economic news at the moment. However, the market is closely monitoring the upcoming event where Federal Reserve Chair Jerome Powell will testify on the economy. This testimony is scheduled for Tuesday at 3:00 PM and is highly anticipated as it might shed light on the Federal Reserve’s future monetary policy decisions. Investors are keen on understanding whether the central bank will continue its current trajectory of rate hikes or if it will adjust its approach in response to inflation and economic growth conditions.

In Japan, similar to the United States, there are no major economic updates. The economic focus remains on external factors as Japan continues to navigate its economic challenges including slow growth and moderate inflation. Market participants are observing global economic indicators and central bank policy shifts, especially those from the United States, to better understand the implications for Japan’s economy.

The USDJPY pair rose slightly by 0.04% to 146.11, indicating that the currency pair is in a consolidation phase. This movement reflects a market waiting for further directional cues, likely from the outcomes of Jerome Powell’s upcoming testimony. The testimony could have significant implications for the USDJPY, depending on what signal Powell gives regarding future interest rate hikes or dovish stances, as higher U.S. interest rates increase the appeal of the dollar against the yen. Should Powell signal a pause or a slower pace of rate hikes, it could weaken the dollar, allowing the yen to strengthen. Conversely, a hawkish stance that supports aggressive interest rate increases could drive the USDJPY even higher, exacerbating disparity in monetary policy between the US and Japan.

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What can we expect from USDJPY today?

USDJPY on Monday rose 0.04% to 146.11. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for USDJPY looks mixed as the pair is likely to consolidate above 145.4 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 148.03 or trades above daily pivot 146.72. While to the downside, the daily low of 146.00 and 145.4 (S1) as immediate support levels. USDJPY need to break on either side to indicate a short-term bias. A break above 148.03 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: