Investors should keep a close eye on the views of FOMC members Michael Barr, Patrick Harker, Loretta Mester, and Raphael Bostic on the latest CPI report and potential timing for a Fed rate cut. These opinions could have a significant impact on the financial markets. As such, it is essential to pay attention to any signals that may move the dial in the market.
In the near term, several factors will influence the USD/JPY trends. Upcoming GDP numbers from Japan, US labor market data, and comments from FOMC members will all play a role in determining buyer demand for the USD/JPY. If labor market data falls short of expectations and there are indications of a possible September Fed rate cut, this could negatively affect demand for the USD/JPY. However, despite this, the contraction in Japan’s economy could still keep interest rate differentials in favor of the US dollar.
Looking at technical analysis, it appears that the USD/JPY has been trading above its 50-day and 200-day EMAs lately. This indicates bullish price trends. If the USD/JPY breaks through its current resistance level at 155 handle and moves towards 156 handle or even reaches its April 29 high of 160.209, investors should be cautious as overbought territory may soon be reached. On the other hand, if the USD/JPY drops below its current support level at 50-day EMA or falls below 151.685 handle support level, this could indicate an impending decline towards oversold territory.
The RSI indicator currently stands at 48.73%, indicating that there is room for further movement before entering oversold territory. Investors should consider various factors when making trading decisions involving USD/JPY pairs such as Bank of Japan meetings, US economic data releases, and reactions from FOMC members when considering their investment strategies.
In conclusion, investors must pay attention to multiple factors when making trading decisions involving currency pairs such as USD/JPY pairs such as FOMC member speeches on CPI reports and potential timing for Fed rate cuts alongside GDP numbers from Japan and US labor market data along with reactions from FOMC members when considering their investment strategies.
