**Japanese Yen and Aussie Dollar Forecasts: USD/JPY Dips Ahead of Key Japan Trade Data**
*Original article by James Hyerczyk, FXEmpire*
The forex market opened the week with notable movements in the Japanese Yen (JPY) and the Australian Dollar (AUD) against the US Dollar (USD), as traders positioned themselves ahead of key economic announcements, particularly Japan’s trade data. Recent developments have led to fluctuations in these currency pairs, with USD/JPY slipping slightly and AUD/USD consolidating following last week’s performance.
Below is an in-depth analysis of recent price actions, along with economic indicators and market sentiment influencing both USD/JPY and AUD/USD currency pairs.
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## USD/JPY Overview: Weakening Ahead of Key Japan Data
The USD/JPY pair showed signs of weakening in early Monday trading in Asia, pulling back from recent highs. Last week, the pair reached its highest level in nearly ten months, but it has since retreated back below the 157.00 level.
### Key Drivers Influencing USD/JPY
– **Profit Taking Post-Rally:**
– After successfully testing the 157.00 level last week, many traders are likely booking profits ahead of crucial trade data from Japan.
– The retreat is seen more as a tactical move rather than a reversal in the overall bullish trend.
– **Upcoming Japan Trade Balance Figures:**
– Due to be released on Wednesday, Japan’s trade balance figures are highly anticipated.
– Investors will be analyzing this data for indications of inflationary pressures and changes in demand for imported and exported goods.
– A stronger trade surplus could empower the Yen due to increased foreign demand for the currency to balance trade payments.
– **Intervention Warnings and Market Sensitivity:**
– Despite the Yen’s weakness, Japanese authorities have issued verbal warnings about possible intervention if excessive volatility continues.
– These intervention concerns are keeping speculators cautious and have contributed to the decline from the highs.
– **US Dollar Consolidation:**
– The greenback has been consolidating as traders await additional economic data from the United States.
– A more stable US Dollar also contributed to the softening in USD/JPY.
### Technical Outlook for USD/JPY
– The pair has pulled back near the 156.75 level after reaching highs above 157.00.
– Momentum indicators show a slight bearish divergence on shorter timeframes, suggesting that the upward momentum may be slowing.
– Key technical support is seen at:
– 156.50: A near-term support level from last week’s pullback.
– 156.00: A psychological level and historical pivot.
– Resistance Levels Include:
– 157.00: The recent high and key psychological level.
– 157.50 and 158.00: Potential breakout zones if economic data favors the Dollar.
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## AUD/USD Outlook: Awaiting Direction Amid Mixed Sentiment
The Australian Dollar (AUD) remained relatively stable against its US counterpart in early trading as market participants monitor upcoming domestic economic data and broader market risk sentiment. The AUD/USD has been constrained in a sideways pattern following mixed signals from last week’s employment data and global commodity trends.
### Influencing Factors on the Aussie Dollar
– **Employment Data Reaction:**
– Australia’s latest job data was not as strong as expected, leading to speculation around future Reserve Bank of Australia (RBA) rate moves.
– The unemployment rate climbed slightly, softening expectations of near-term tightening.
– Despite this, the data wasn’t seen as weak enough to confirm a dovish pivot by the RBA.
– **Commodity Prices and China Links:**
– Australia’s economic health is closely tied to commodity exports, particularly to China.
– Recent indicators show mixed news from China, Australia’s largest trade partner.
– Iron ore prices have held steady, offering some support to the Aussie Dollar.
– **Global Risk Appetite:**
– AUD
Explore this further here: USD/JPY trading.