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In the context of USD/JPY Forecast and predicting what might happen to the USD/JPY exchange rate, the Bank of Japan did what people expected during their October meeting. They didn’t change their policies. They kept the interest rate at -0.1% and the target for the 10-year Japanese government bonds at 0%. Some experts thought they might increase the 10-year yield target from 1% to 1.25% because of strong inflation numbers. But the Bank of Japan confirmed they want to keep the 10-year yield around zero percent. They will do this by controlling the yield curve and not letting it go above 1.0%. They will mainly do this by buying a lot of government bonds and making quick market moves. Because of this decision, the USD/JPY exchange rate went up by more than 0.5% and crossed the 150.00 level.
Market Focus: Dallas Fed Index and Middle East Impact
On Monday, the Dallas Fed Manufacturing Index drew notable investor attention. While the U.S. manufacturing sector constitutes a relatively modest fraction of the nation’s economy. The prudent attention to emerging sub-components within U.S. economic reports is imperative. Factors such as trends in new orders, price dynamics, and employment statistics merit close scrutiny. They may portend nascent economic vulnerabilities that could engender concerns of an impending recession.
Beyond the purview of the economic calendar, developments originating from Capitol Hill concerning the Middle East conflict possess the capacity to influence market risk sentiment. Increased U.S. military presence and heightened activity within the Middle East region could potentially exert a weakening influence on the USD/JPY currency pair.
USD/JPY Forecast: Technical Analysis and Future Projections
In terms of technical analysis, the USD/JPY currency pair currently maintains positions above both the 50-day and 200-day Exponential Moving Averages (EMAs), signifying a conspicuous bullish trajectory. A breach of the 150.201 resistance level would pave the path for a prospective challenge of the 151.889 resistance threshold.
Also Read: Bank of Japan Loosens Grip: Key Yields to Exceed 1%
The future trajectory of the USD/JPY hinges significantly on prevailing market risk appetite and conjecture regarding any potential divergence in policy by the Bank of Japan away from its protracted ultra-loose monetary stance. In the event of a depreciation below 149, it would fortify a decline towards the 148.405 support level, with developments emanating from the Middle East region holding substantive sway over buyer sentiment concerning the USD/JPY.
Source: FX empire
USD/JPY Forecast: RSI and Technical Outlook
Of note, the 14-day Relative Strength Index (RSI) currently registers at 55.59. Which implying that the USD/JPY could potentially breach the 150.201 resistance level. And that before potentially traversing into overbought territory. Conspicuously, the USD/JPY is presently positioned beneath the 50-day EMA in the short term. But retains its elevation above the 200-day EMA, which augments a bearish near-term outlook along with a bullish long-term perspective. In a breakout materialize above the 50-day EMA and the 150.201 resistance level, the 151 level would emerge as the subsequent target. while a regression beneath 149 and the breach of the 200-day EMA would buttress a movement towards the 148.405 support level. The 14-period 4-hourly RSI, currently at 40.03, suggests the potential of a downturn in the USD/JPY beneath the 149 handle before the prospect of entering into an oversold phase.
Source: FX empire
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Disclaimer:
Please note that this article serves solely for informational purposes. As such, it is not financial advice. We strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.
