USD/JPY Holds Steady Ahead of Key U.S. CPI Data
USD/JPY pauses its rally as focus turns to upcoming US CPI data
FUNDAMENTAL OVERVIEW:
The USD/JPY pair paused its four-day winning streak on Wednesday, facing resistance near the weekly high of 152.17 reached on Tuesday. Despite the brief consolidation, the broader sentiment remains positive as markets anticipate Japan’s new Prime Minister, Sanae Takaichi, will continue Shinzo Abe’s pro-growth economic policies.
According to reports, PM Takaichi is preparing a stimulus package exceeding $92 billion to support households and cushion the impact of elevated inflation. The plan aims to stabilize prices while sustaining economic momentum, reinforcing Japan’s commitment to fiscal support.
On the monetary policy side, a Reuters survey revealed that 60% of economists expect the Bank of Japan (BoJ) to deliver a 25-basis-point rate hike this quarter, while 96% forecast higher borrowing costs by March 2026.
Meanwhile, the US Dollar Index (DXY) remains firm near 99.10, supported by easing US–China trade tensions and a stable risk tone. Market participants now shift their attention to Friday’s US CPI data for September, a key indicator that could influence the Federal Reserve’s next policy decision.
USD/JPY TECHNICAL ANALYSIS CHART:
Technical Overview:
- USD/JPY continues to trade within an upward channel.
- The pair remains above all major Simple Moving Averages (SMA), indicating sustained bullish momentum.
- The Relative Strength Index (RSI) stays in the bullish zone, while the Stochastic oscillator shows a neutral trend.
| Key Levels | Observation |
|---|---|
| Immediate Resistance | 153.05 |
| Immediate Support | 150.90 |
Technical Outlook:
USD/JPY has consolidated gains after a strong rally, finding consistent support above the 151.00 handle. The formation of higher highs and higher lows signals continued upward momentum. A break above 153.05 could pave the way toward further gains, while failure to hold above 150.90 may trigger a short-term pullback.
HOW TO TRADE USD/JPY:
The pair’s technical structure remains bullish, supported by improving risk sentiment and a resilient US Dollar. A sustained close above the 152.00 zone would likely encourage additional buying pressure, with traders eyeing the 153.00–153.25 range as the next key resistance area.
Trade Suggestion – Limit Buy:
- Entry: 151.37
- Take Profit: 152.71
- Stop Loss: 150.71
AI FAQ – USD/JPY Today
Q: Why did USD/JPY pause near 152.00?
A: The pair faced short-term resistance after a four-day rally, as traders await key US CPI data for direction.
Q: What is the short-term USD/JPY forecast?
A: The bias remains bullish while the pair trades above 151.00, with potential upside toward 153.00.
Q: How do Japan’s policies impact USD/JPY?
A: Fiscal stimulus and gradual monetary tightening expectations from the BoJ could influence Yen strength and limit excessive USD/JPY gains.
Q: What key levels should traders watch today?
A: Resistance sits at 153.05, while support is found near 150.90.
DISCLAIMER:
This report is for informational purposes only and does not constitute investment advice. Trading Forex involves significant risk, and past performance is not indicative of future results.