In the recent foreign exchange market, the US dollar/Japanese yen has shown some volatility. Although the Japanese yen has rebounded after US President Trump postponed tariffs on Canada and Mexico, its depreciation against the US dollar continues.

Fundamental analysis

The market generally believes that the Bank of Japan may further raise interest rates, which provides support for the yen. The Federal Reserve may further loosen monetary policy, narrow the spread between the Japanese yen and the US dollar, which may be beneficial for the yen and avoid its excessive depreciation.

At the same time, Trump's postponement of tariffs on Canada and Mexico has eased concerns about the global trade landscape and weakened the safe haven demand for the yen, leading to further weakness. In addition, the market is concerned that Japan may become Trump's next trade target, exacerbating negative sentiment towards the yen.

The moderate strength of the US dollar helped maintain the USD/JPY above 155.00. Despite the policy uncertainty facing the US dollar, strong US economic data still makes it attractive in the global market and continues to exert pressure on the Japanese yen.

Technical analyst interpretation:

From a technical perspective, the USD/JPY is currently facing multiple key technological levels. Firstly, the USD/JPY is facing strong technical resistance around 156.00, which may limit further appreciation of the exchange rate. If we break through this level, the next technical resistance will be in the 156.25 area, which is the high point from last week. If the price breaks through the 156.25 level, it may further rise to the 156.75 area. If the price breaks through the 157.00 level, it may approach the 158.00 level (although there may be some resistance near 157.50).

On the other hand, if the USD/JPY exchange rate falls below the important psychological threshold of 155.00, it may trigger further downward pressure. The downward support is located in the 154.65 area. If the price further declines, 154.30, 154.00, and 153.70 will be the next support areas, which include the January low and are potential strong support levels. If the price effectively breaks through these support areas, it may accelerate the decline, and the exchange rate may further move towards the 153.00 level, then touch the 152.60-152.55 and 152.30 areas. 152.30 is the area where the 100 day moving average is located, so this position may become a strong support zone for the exchange rate.

The current trend of the US dollar/Japanese yen exchange rate presents a game between bulls and bears. From the current technical trend, if the price breaks through the levels of 156.00 and 156.25, it may attract more buying and drive the exchange rate towards higher levels.

If the price breaks through the support level of 155.00, bears will dominate and the USD/JPY may accelerate its downward movement, further approaching the levels of 153.00 and 152.30.

summary

From a fundamental perspective, the US dollar/Japanese yen exchange rate is influenced by various factors. The expectation of the Federal Reserve's loose policy and the uncertainty of Trump's trade policy are affecting the interest rate differential between the US dollar and the Japanese yen, and putting pressure on the Japanese yen exchange rate. Although the Japanese yen has received some support, Trump's trade policies and the moderate strength of the US dollar still push the dollar/yen to remain relatively high.

From a technical perspective, the USD/JPY exchange rate is facing strong resistance and support levels, and its future trend will depend on whether the price can break through the resistance range of 156.00 and 156.25, or fall below the support range of 155.00.