**USD/JPY and AUD/USD Watch: 153 Remains the Key for Dollar-Yen, Aussie-Dollar Finds Footing Amid Wall Street Recovery**
*Based on the article originally authored by Matt Weller for Forex.com, with added research and analysis.*
—
The ongoing volatility in the foreign exchange markets highlights pivotal technical levels, especially for the USD/JPY and AUD/USD pairs. As global investors closely monitor the trajectory of monetary policy in the United States, Japan, and Australia, these currency pairs remain at the forefront, reflecting economic divergences and market sentiment.
### Overview: Market Sentiment and Key Themes
– **Interest rate trajectories**: The US Federal Reserve’s messaging remains cautious, emphasizing inflation risks and suggesting that policy could stay restrictive for longer than many market participants expected. In contrast, the Bank of Japan (BoJ) has only marginally shifted from its longstanding ultra-loose policy, supporting USD/JPY at elevated levels.
– **Global equities stability**: Wall Street’s recent bounce has provided some stabilization to risk-sensitive currencies like the Australian dollar, even as expectations for aggressive Fed rate hikes fade.
– **Safe haven demand**: The US dollar remains in demand as a safe-haven asset, especially amid geopolitical tensions and economic uncertainty.
– **Yield differentials**: The spread between Japanese government bond yields and US Treasuries continues to be a significant driver for USD/JPY, with upward pressure for the pair as long as the gap persists.
### USD/JPY Analysis
#### Recent Market Behavior
The USD/JPY currency pair continues to hover near multi-decade highs, drawing close scrutiny from both market participants and policymakers.
– **Key level of 153**: The 153.00 level has repeatedly acted as a crucial pivot for USD/JPY. Traders watch this area for potential intervention or at least verbal jawboning from Japanese authorities, who are alert to the risks of rapid yen depreciation.
– **Bank of Japan stance**: BoJ Governor Kazuo Ueda has delivered cautious messaging, signaling a willingness to consider further steps toward policy normalization but emphasizing the incremental and data-dependent nature of any rate hikes.
– **US economic indicators**: Robust job growth and sticky inflation prints in the US reinforce expectations that the Fed will “hold higher for longer,” supporting the dollar’s advance against currencies like the yen.
#### Technical Outlook
The technical picture for USD/JPY underscores market apprehension about the sustainability of yen weakness and the risk of intervention.
– **Resistance and support**:
– The 153.00 level is major resistance, with the next targets near 155.00 if this area breaks.
– Support is evident around 151.00 to 151.50, an area repeatedly tested during recent pullbacks.
– **Momentum signals**:
– Daily Relative Strength Index (RSI) readings have flashed “overbought” warnings, suggesting a potential for brief corrections.
– Moving averages continue to trend upward, reinforcing the overall bullish
Read more on AUD/USD trading.