US Dollar Outlook: USD/JPY
USD/JPY seems to be defending the rebound from the August low (146.22) as it climbs to a fresh weekly high (149.14), and data prints coming out of the US may keep the exchange rate afloat as the US Non-Farm Payrolls (NFP) report is anticipated to show another rise in employment.
US Dollar Forecast: USD/JPY Defends Rebound from August Low
USD/JPY may further retrace the decline from the August high (150.92) even though the Federal Reserve prepares to further unwind its restrictive policy, and the 50-Day SMA (147.15) may continue to establish a positive slope as the exchange rate breaks out of the range bound price action from last week.
US Economic Calendar
Looking ahead, the NFP report may sway USD/JPY as the US is expected to add 75K jobs in August, and indications of a strong labor market may generate a bullish reaction in the Greenback as it raises the Fed’s scope to keep interest rates higher for longer.
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In turn, swings in the carry trade may continue to influence USD/JPY as the Federal Open Market Committee (FOMC) still combats inflation, but a weaker-than-expected NFP report may drag on the US Dollar as it fuels speculation for an imminent Fed rate cut.
With that said, USD/JPY may attempt to test the August low (146.22) if it gives back the advance from the start of the week, but the exchange rate may continue to carve a series of higher highs and lows as it breaks out of the range bound price action from last week.
USD/JPY Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; USD/JPY on TradingView
- USD/JPY may extend the advance from the start of the week as it rebounds ahead of August low (146.22) but need a close above 148.70 (38.2% Fibonacci retracement) to bring 150.30 (61.8% Fibonacci extension) on the radar.
- A breach of the August high (150.92) opens up the March high (151.31), with the next area of interest coming in around 151.60 (61.8% Fibonacci extension).
- At the same time, lack of momentum to close above 148.70 (38.2% Fibonacci retracement) may push USD/JPY back toward 147.10 (38.2% Fibonacci retracement), and failure to hold above the weekly low (146.79) may lead to a test of the August low (146.22).
Additional Market Outlooks
US Dollar Forecast: EUR/USD Pulls Back Ahead of August High
Canadian Dollar Forecast: USD/CAD Eyes Monthly Low Ahead of US PCE
Australian Dollar Forecast: AUD/USD Defends Rebound from Monthly Low
Gold Price Bounces Back Ahead of August Low
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
