**USD/JPY Technical Analysis: Market Awaits Fed Chair Powell’s Remarks**
*Original article credit: InvestingLive.com*
As the USD/JPY pair continues to trend within a defined technical range, traders are looking ahead to crucial upcoming events that could redefine its trajectory. Chief among these is the eagerly anticipated speech by Federal Reserve Chair Jerome Powell. Investors are keenly watching for any signals that might hint at future monetary policy actions, particularly with interest rate uncertainty still clouding the markets. Recent price movements show clear levels of support and resistance, and upcoming fundamental catalysts could push the pair out of its current consolidation.
This technical analysis takes a deeper dive into the current state of USD/JPY, evaluating chart patterns, support and resistance areas, broader economic factors, and what to anticipate from the Federal Reserve in the coming trading sessions.
## Recent Performance Overview
USD/JPY has shown relative calmness in recent sessions, consolidating within a range as traders assess economic reports and speculate about Fed policy direction.
– The pair has hovered near the 145.00–147.00 range, showing limited volatility as traders wait for clarity on monetary policy.
– Despite minor upswings, momentum indicators suggest a cautious environment where bulls and bears are both waiting for confirmation of a new trend.
– Price action has been heavily influenced by U.S. Treasury yields and overall dollar strength against safe-haven currencies like the yen.
The dollar’s stability has provided short-term support for USD/JPY, but market hesitation is apparent ahead of the upcoming Federal Reserve commentary.
## Technical Analysis Breakdown
### Key Support and Resistance Levels
As of the latest market action:
– Immediate support is seen at around 145.00, a psychological round number that has held the pair in recent sessions. Breaking below this could expose further downside.
– Deeper support is found near the 144.50 area, which aligns with the 50-day Simple Moving Average. A break below this level would indicate a shift toward bearish sentiment.
– On the upside, resistance is firmly positioned near 147.00. This level has repeatedly capped rallies and remains the critical line the bulls must break for sustained upside potential.
– If 147.00 is cleared with strong volume, the pair could target the 148.50 area, last seen in November 2022 prior to intervention from Japanese authorities.
### Chart Patterns and Indicators
– The USD/JPY daily chart shows a mild rising trendline forming from lows around 140.00, indicating a mildly bullish bias, albeit lacking strength.
– Relative Strength Index (RSI) is around the neutral 50 mark, signaling a lack of strong momentum in either direction.
– MACD (Moving Average Convergence Divergence) shows a flattening histogram, further echoing the idea that momentum is currently weak and directionless.
These conditions are typically indicative of consolidation before a breakout, which could be fueled by new fundamental factors.
### Moving Averages Context
– The pair is trading slightly above its 50-day SMA, suggesting short-term bullish sentiment, but not convincingly enough for aggressive long positions.
– The 200-day SMA sits far below the current price, signaling that the longer-term trend still favors the upside, although near-term outlook depends on upcoming policy signals.
## Fundamental Drivers to Watch
The upcoming speech by Federal Reserve Chair Jerome Powell is the marquee event for USD/JPY traders in the short term. Expectations are mixed, with some speculating that the Fed may adopt a more dovish stance following a recent slowdown in inflation data.
### Key Economic Elements Impacting USD/JPY:
– **U.S. Employment Data:** Nonfarm payrolls and weekly jobless claims remain central to how the Fed evaluates labor market strength. A weakening labor market could push the Fed to pause or reverse rate hikes.
– **Inflation Measures:** Core PCE and CPI results play a major role in deciding monetary policy direction. Softening inflation may encourage a more accommodative monetary stance.
– **Bond Y
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