- The yen neared the 150 level, heightening concerns about potential intervention.
- The dollar strengthened, building on gains from the previous week.
- The BOJ opted to maintain ultra-low interest rates and adhere to its dovish policy stance.
Today’s USD/JPY forecast is bullish as the yen neared the critical 150 per dollar level, heightening concerns of potential currency intervention. Meanwhile, the Bank of Japan and Governor Kazuo Ueda dismissed hopes of an immediate departure from their strongly accommodative monetary policy.
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On the other hand, the dollar strengthened in the broader currency market, building on gains from the previous week. This rise followed a surprisingly hawkish stance from the Federal Reserve. Notably, the Fed indicated that US interest rates would need to remain elevated longer than anticipated.
The yen declined to its lowest level in over ten months, reaching 148.49 per dollar and remaining perilously close to the 150 threshold. Many market observers viewed this level as a trigger point for possible intervention by Japanese authorities.
Carol Kong, a currency strategist at the Commonwealth Bank of Australia, remarked, “I don’t believe the specific level is the primary factor triggering intervention. Rather, the pace of change is more crucial. Nevertheless, given the numerous warnings from Japanese officials, there is an increased likelihood of FX intervention now.”
Moreover, the Japanese currency experienced a drop of more than 0.5% on Friday after the BOJ opted to maintain ultra-low interest rates. Additionally, Governor Ueda emphasized the importance of further data assessment before considering interest rate hikes.
USD/JPY key events today
Investors do not expect significant events from the US or Japan; the pair might consolidate today.
USD/JPY technical forecast: Bears may take control at 148.50.
On the charts, the USD/JPY price has paused near the 148.50 critical resistance level. This pause follows a robust and bullish move from the 147.51 support level. The current bias is bullish as the price trades above the 30-SMA. At the same time, there is strong bullish momentum as the RSI is in bullish territory. However, the price recently reversed when it got near the 148.50 resistance.
Therefore, there is a chance that bears will emerge to push the price lower. Moreover, it might lead to a consolidation with support at 147.51 and resistance at 148.50. If bears get stronger and break below 147.51, the price will likely retest 146.50.
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