Based on the article “USD/JPY Forecast: 24/10 Bullish Trend Strengthens – Chart” originally published on MENAFN, the following is a rewritten analysis of the market performance and future outlook for the USD/JPY currency pair. Credit goes to the original author for the foundational insights.
USD/JPY Forecast: Bullish Momentum Intensifies
The USD/JPY currency pair continues to experience robust upward momentum, signaling an increasingly strong bullish trend. This movement reflects a variety of technical and fundamental factors that are influencing the forex market. The pair’s resilience against downward corrections highlights persistent demand for the US dollar against the Japanese yen, supported by diverging monetary policies and broader economic outlooks for the US and Japan.
JAPANESE YEN UNDER PRESSURE
One of the primary factors behind the bullish trend of USD/JPY is the weakness in the Japanese yen. The Bank of Japan (BoJ) remains firmly committed to its ultra-loose monetary policy framework, setting it apart from other major central banks.
Key factors impacting the yen:
– Persistent Yield Curve Control (YCC): The BoJ continues to manage its yield curve by limiting the ten-year Japanese Government Bond (JGB) yield, indirectly exerting downward pressure on the yen.
– Dovish stance: Despite rising inflation, the BoJ has maintained its soft monetary policy, citing the need to promote wage growth and domestic demand.
– Limited inflationary response: While globally inflation has led many central banks to tighten policy, Japan’s inflation remains relatively contained, justifying the BoJ’s cautious approach.
– Intervention speculation: Despite the yen’s weakness, Japanese authorities have so far refrained from significant intervention, contributing further to downside pressure on JPY.
On the other hand, the US Federal Reserve’s consistently hawkish stance has bolstered the dollar across global currency markets.
US DOLLAR SUPPORTED BY FEDERAL RESERVE
The Federal Reserve, in contrast to the BoJ, continues to prioritize inflation containment through high interest rates. This divergence in monetary policy has fortified the US dollar, elevating it across major currency pairs, including USD/JPY.
Key factors strengthening the US dollar:
– Elevated interest rates: The Fed has brought rates to their highest levels since before the 2008 financial crisis, making US assets more attractive.
– Hawkish commentary: Fed officials continue to telegraph a data-dependent but restrictive policy path, discouraging premature expectations of rate cuts.
– Strong macroeconomic indicators: Key reports indicate a resilient US economy, with GDP growth and robust labor market data supporting the Fed’s tightening bias.
– Safe-haven appeal: In uncertain geopolitical environments, the dollar retains its status as a global safe-haven asset.
The economic policy divergence between the BoJ and the Fed remains a central driver of USD/JPY’s persistent bullish momentum.
US DOLLAR/JAPANESE YEN TECHNICAL ANALYSIS
Technical indicators and price action offer further confirmation of the pair’s bullish trajectory. The USD/JPY broke through key resistance levels in recent sessions, suggesting strong technical support for continued gains.
Key technical developments:
– Fresh highs: The pair has surpassed recent resistance around the 149.50 level, reaching its highest price in months.
– Upward channel: Price action continues to respect an upward sloping channel, confirming the current bullish trendline.
– Moving averages: The 50-day and 200-day moving averages remain well below current price levels, reflecting a positive long-term bias.
– RSI levels: While the Relative Strength Index is nearing overbought territory, there is room for further climb without triggering a major reversal.
– Fibonacci retracement: Retracement levels suggest consolidation near 61.8 percent has occurred, now functioning as a support zone.
Support and resistance zones:
– Key resistance levels:
– 150.00: A psychological barrier that has drawn increased attention from traders and authorities alike.
– 151.93: The 2022 high, which many
Explore this further here: USD/JPY trading.