USD/JPY Lacks Firm Direction After Monday’s Relief-Rally
USD/JPY Analysis
The pair comes from its worst month in twenty-four years, having extended the decline to four-month lows in December. This has been largely fueled by expectations for a downshift by the Fed, with a 50 basis points rate hike next week, supported by softer inflation and Chair Powell's last speech.
A series of strong economic data by the US however, firmed up expectations around the central bank's tightening path, which sparked a USDOLLAR relief-rally at the start of the week. USD/JPY is constructive today and has the ability to push for fresh highs and towards the key 139.50-140.60 region.
However, this is a strong cluster of resistances which includes the 23.8% Fibonacci of the October high/December low slump, the descending trend line from those highs and the EMA200. The greenback does not yet inspire confidence for clearing all those hurdles and looking towards and beyond 142.78.
USD/JPY is upbeat, but has been largely consolidating its gains after Monday's strong showing and remains in a precarious position. A containment of the so far limited rebound, leaves the pair in risk of lower lows (133.61), although 130.38-09 looks distant for now.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
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