USD/JPY Pulls Back Ahead of Monthly High to Halt Three-Day Rally
USD/JPY pulls back ahead of the monthly high (155.89) to snaps the recent series of higher highs and lows.
Share this:
US Dollar Outlook: USD/JPY
USD/JPY pulls back ahead of the monthly high (155.89) to snaps the recent series of higher highs and lows, and the exchange rate may trade within the opening range for February should it consolidate over the remainder of the week.
USD/JPY Pulls Back Ahead of Monthly High to Halt Three-Day Rally
USD/JPY appears to be unfazed by the unexpected uptick in the US Producer Price Index (PPI) as it halts a three-day rally, and the exchange rate may continue to give back the rebound from the monthly low (150.93) even as Federal Reserve Chairman Jerome Powell tells US lawmakers that ‘we do not need to be in a hurry to adjust our policy stance.’
Join David Song for the Weekly Fundamental Market Outlook webinar.
David provides a market overview and takes questions in real-time. Register Here
Nevertheless, data prints coming out of the US may keep the Federal Open Market Committee (FOMC) on the sidelines as the PPI climbs to 3.5% in January from 3.3% the month prior, with the core rate reflecting a similar behavior as it crossed the wires at 3.6% versus forecasts for a 3.3% print.
US Economic Calendar
As a result, the Fed may keep US interest rates on hold at its next meeting in March, but the update to the US Retail Sales report may push the central bank to further unwind its restrictive policy as household spending is expected to contract 0.1% in January.
In turn, signs of a slowing economy may keep USD/JPY under pressure as it fuels speculation for an imminent Fed rate-cut, but a better-than-expected Retail Sales report may generate a bullish reaction in the Greenback as it instills an improved outlook for the US economy.
With that said, the pullback in USD/JPY may turn out to be temporary as the Fed pauses its rate-cutting cycle, but the exchange rate may struggle to retain the rebound from the monthly low (150.93) as it snaps the recent series of higher highs and lows.
USD/JPY Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; USD/JPY on TradingView
- USD/JPY gives back the advance from the start of the week as it pulls back ahead of the monthly high (155.89), and a move below 151.95 (2022 high) may push the exchange rate towards the monthly low (150.93).
- Next area of interest comes in around the December low (148.65), with a break/close below the 148.70 (38.2% Fibonacci retracement) to 150.30 (61.8% Fibonacci extension) zone opening up the 144.60 (50% Fibonacci retracement) to 145.90 (50% Fibonacci extension) region.
- At the same time, USD/JPY may track sideways should it hold within the opening range for February but need a move back above 153.80 (23.6% Fibonacci retracement) bringing the monthly high (155.89) on the radar.
Additional Market Outlooks
AUD/USD Eyes January High Ahead of RBA Rate Decision
Gold Price Forecast: RSI Still Sits in Overbought Territory
GBP/USD Halts Selloff to Carve Bullish Engulfing Candlestick
EUR/USD Recovers as Chair Powell Remains Willing to Adjust Policy
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
Related tags:
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
USD/JPY Fed-Fueled Pullback Ahead of BoJ
USD/JPY has a theoretical cap after the intervention in July and then the verbal threats thereafter, but the big question now is whether a larger case of carry unwind lurks around the next corner.
DAX forecast: AI optimism offers relief ahead of central bank meetings
The DAX is finding some relief from the recent improvement in risk appetite, with investors becoming less concerned about the sustainability of the AI trade
Gold outlook: XAU/USD holds above key support ahead of FOMC
Gold forecast hangs in the balance as the metal is clinging to $4,000 ahead of the Fed, but higher oil prices and firm yields are making it hard for the metal to turn its rebound into a sustained rally. But can that change soon?
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.