It's still too early to be bullish on the Japanese yen, as the US and Japan have fallen below 154.55 support and may test 151.86!
At around 11:00 am Beijing time on Wednesday, July 31st, the Bank of Japan will hold an interest rate decision. JPMorgan expects that the Bank of Japan will not raise interest rates at any time in July or 2024. Raising interest rates in July is not their basic forecast, and they do not expect to raise rates for the rest of 2024.
JPMorgan Chase believes that it is too early to take a bullish stance on the Japanese yen.
According to reports, senior officials of the Bank of Japan and the manager of its Osaka branch, Kazunari Kamiyama, stated last Thursday that the Bank of Japan hopes to maintain a loose monetary environment as much as possible.
Mizuho recently predicted that the hawkish attitude of the Bank of Japan at this month's meeting will be lower than expected.
USD/JPY traded around 157.60 on Monday. Market analyst Akhtar Faruqui stated that daily chart analysis shows that the US dollar against the Japanese yen is below its 9-day moving average, indicating a short-term downward trend. This indicates waiting for signs of trend reversal before considering buying. In addition, the relative strength index (RSI) on the 14th was below 50, strengthening the bearish outlook.
Faruqui said that the US dollar against the Japanese yen may find important support near the June low of 154.55. If it falls below this level, it may lead to the exchange rate falling towards the low point of 151.86 in May.
On the upward trend, the direct resistance level of the US dollar against the Japanese yen is at the 9-day moving average (currently at 158.08). If it breaks through this level, the exchange rate may test the psychological resistance level around 162.00.
USD/JPY daily chart
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