Slight Move Lower as Choppy Forex Conditions Remain

The USD/JPY has produced a downturn in early trading this morning, but the price of the currency pair remains with the higher elements of its one-month chart.

The USD/JPY is trading near the 143.900 mark as of this writing. This ratio has been accomplished after the USD/JPY began its early session this morning near the 144.700 level. A high in the USD/JPY was accomplished last Friday when the USD/JPY traded above the 145.000 ratio momentarily. The downward momentum produced in early trading today will be welcomed, but the USD/JPY remains within the higher elements of the mid-term range.

The Bank of Japan continues to keep its dovish interest rate policy solidly in place, as its counterpart – the U.S. Federal Reserve remains within an aggressive stance.  Intriguingly the USD/JPY has traded lower this morning in the wake of the FOMC Meeting Minutes from the Federal Reserve published yesterday, which is a prime example perhaps of the report’s statements likely being anticipated.  Trading over the mid-term in the USD/JPY has remained rather bullish, but last week’s high-challenged values have not been seen since apex highs were made between early October and November of 2022.

While the U.S. Fed’s aggressiveness has been anticipated by some analysts as leaning towards an interest rate hike in late July, which may have been priced into the USD/JPY, traders need to consider other factors too. After the highs in the USD/JPY were created early on Friday, the currency pair essentially began to incrementally trade lower and tested the 144.000 mark on Monday. However, trading volumes were light early this week because of the U.S. holiday. Trading volumes have now returned to normal and interestingly, the USD/JPY still remains close to 144.000, and the drop below this Monday’s lows has only occurred in the last few hours.

• Services PMI data will come from the U.S. today, but many eyes will be focused on tomorrow’s Non-Farm Employment Change results and the Average Hourly Earnings data.
• If the inflation numbers via the U.S. earning statistics come in stronger on Friday, this would solidify another interest rate hike in late July from the Fed potentially. The question is if this sentiment has been priced into the JPY/USD already.
• Traders should be cautious today and tomorrow in the USD/JPY and be on guard for choppy conditions and fast price velocity to emerge. Behavioral sentiment could become increasingly nervous over the next twenty-four hours.

Current Resistance: 144.050

Current Support: 143.710

High Target: 144.520

Low Target: 143.560

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