The USD/JPY pair edged higher in Wednesday's session, trading around the 143.80 level, as the markets remained directionless due to the absence of Bank of Japan's pivot clues. To the downside, the Federal Reserve's dovish clarity may fuel some downside in case the Personal Consumption Expenditures (PCE) November figures come lower than expected on Friday.
In addition, Japan's weaker economy, which mirrors continual JGB yield declines, signaling that the Bank of Japan's rate hike is still on hold, makes the JPY lose interest among investors. On the US side, its economy is holding strong, while the Fed hinted at more rate cuts than expected for 2024, which leaves the US Dollar in a challenging situation. However, as long as inflation continues to edge downwards and give markets the chance to bet on earlier rate cuts, it could pave the way for additional downside.
Presently, US bond yields are in decline. The 2-year rate declined to 4.40%, while the 5-year and 10-year yields are lower at 3.89% each. This current trend could weigh on the USD as yields and currency tend to have an inverse relationship.
For Friday, investors will eye November's PCE figures from the US, with the headline and core figures expected to have decelerated to 2.8% YoY and 3.3% YoY.
Reflecting largely on the daily chart, the immediate short-term bias seems skewed to the upside. Specifically, the Relative Strength Index (RSI) slope is positively inclined and in the positive territory, suggesting that buying pressure has been gradually increasing, further supported by the Moving Average Convergence Divergence (MACD), which lays out decreasing red bars. However, it is crucial to understand that the current bullish momentum has not yet become sufficiently convincing.
The pair's interaction with Simple Moving Averages (SMAs) brings in a different perspective. With the pair trading below the 20 and 100-day SMAs, bearish influences hold sway over the shorter time frames. However, the tug-of-war between bulls and bears is not entirely skewed. This is evinced by the pair being above the 200-day SMA, suggesting that the bulls aren't out of the game on the broader scale.
Support Levels: 143.50, 143.00, 142.00.
Resistance Levels: 145.00, 145.80 (20-day SMA), 147.00.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.