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USD/JPY Technical Analysis: Move Towards Overbought Levels


According to the performance on the daily chart, the USD/JPY currency pair is in a stage of reversing the general trend to a bullish one.

Amid strong fluctuation in the performance of the price of the USD/JPY currency pair, the bulls moved strongly in prices towards the resistance level 132.90.


The yen is a popular asset during turbulent times.

During the Friday session, it was under downward pressure, reaching the support level 129.80.

I expect the performance to continue today in a state of instability, as markets and investors await the announcement about the name of the Japanese central bank and the announcement of important US inflation numbers. In addition, it will also be about the future of US central bank policy and expected US inflation numbers. 

Gov. Michele Bowman said the Fed is likely to continue raising US interest rates to curb price growth, which could slow economic growth and affect the labor market. “We are still a long way from achieving price stability, and I expect that further tightening of monetary policy will be necessary to bring inflation down toward our goal,” Bowman added at a community banking conference in Orlando, Florida. And “doing so is likely to lead to weaker growth in economic activity and some deterioration in labor market conditions.” 

She said that restoring price stability is essential to support a strong and sustainable labor market. And “While there are costs and risks to tightening monetary policy to bring down inflation, I see the costs and risks of allowing inflation to continue to be much greater.” For their part, Fed officials raised the benchmark interest rate by a quarter of a percentage point to a range of 4.5% to 4.75% on February 1. 

The smaller move followed a half-point increase in December and four rises of 75 basis points prior to that. Officials predicted in December that rates would peak at 5.1% this year, according to their median forecast. They will update these estimates next month. For his part, US Federal Reserve Chairman Jerome Powell said last week that more interest rate hikes would be needed to crush inflation. Investors rose seeing rates peaked this year and are now broadly in line with policymakers’ expectations after the much stronger-than-expected January jobs report showed employers added 517,000 new workers in January while the unemployment rate fell to 3.4. %. , the lowest since 1969. Bowman also said the continued tightness in the labor market puts upward pressure on inflation, even if some components of inflation moderate because of improvements in supply-side factors.  

The longer high inflation persists, the more likely households and firms are to expect higher inflation over the long term. If that’s the case, the FOMC’s job of lowering inflation will be even more difficult,” he said, referring to the FOMC’s policymaking committee.  

Forecasts of the US Dollar against the Japanese Yen:  

  • According to the performance on the daily chart below, the USD/JPY currency pair is in a stage of reversing the general trend to a bullish one.  
  • This is despite the technical indicators moving towards overbought levels after its recent gains.  
  • If the US dollar gets additional momentum from the US inflation figures today, who will take over the bank?

The currency pair may move towards stronger ascending levels, and the closest ones are currently 133.25 and 134.75, respectively. On the other hand, and for the same period of time, in the event that the USD/JPY currency pair moves below the support level of 130.70, it will be a threat to the recent upward move. At the same time it will move the pair to buying areas again.

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