|

USD/JPY: On the eve of major events and publications

The focus of market participants today will be data on the dynamics of US GDP. The forecast of economists suggests a slowdown in the growth of the US economy in the 1st quarter of 2023 - from 2.6% to 2.0%. This indicator (GDP) is the main indicator of the state of the American economy, and along with data on the labor market and inflation, GDP data are key for the country's central bank in determining the parameters of its monetary policy.

USDJPY

A slowdown in GDP may confirm growing fears of a possible recession in the US, and is likely to also negatively affect the dynamics of the dollar, especially if real GDP data turns out to be even worse.

On Monday and Wednesday, another major indicator will be published: PMI indices (by ISM) of business activity in the manufacturing and service sectors of the American economy. Along with today's GDP data, they will be the last of the most important before the adoption of the Fed decision on Wednesday on the interest rate. Economists are forecasting another 25 basis points increase in US borrowing costs to 5.25% before Fed officials take a pause in increases to move towards monetary easing by the end of the year.

At the end of this week, the last one in April, the Bank of Japan will hold its meeting on monetary policy issues. The Central Bank wants to avoid a sudden normalization of monetary policy, as this will have a big impact on the markets, Kazuo Ueda, the new governor of the Bank of Japan, said recently this month. At the same time, Ueda confirmed that "the Bank of Japan will maintain the current monetary easing." Therefore, most likely, tomorrow there will be no surprises and unexpected decisions on the part of the leadership of the Japanese Central Bank: the interest rate, with a high degree of probability, will be maintained at the same level of -0.1%, as well as the volume of purchases of Japanese government bonds and the parameters for controlling the curve their profitability.

From a technical point of view, you can see how in recent days and on the eve of important publications, the USD/JPY pair is consolidating in the area of the balance line, the role of which is currently played by the 200-period moving average on the daily chart of the pair.

At the same time, the dollar itself and its DXY index maintain a downward trend, falling towards the psychologically significant mark of 100.00.

The dynamics of the USD/JPY pair is also affected, among other things, by the status of protective assets of both the yen and the dollar (under certain circumstances), and very often the USD/JPY pair moves according to its own algorithm, different from the dynamics of other major dollar pairs. Although, technical analysis can also be fully used here.

Support levels: 133.85, 133.40, 133.00, 132.70, 130.57, 129.55, 127.22, 124.00, 121.00.

Resistance levels: 134.25, 135.00, 135.10, 137.00, 137.80, 138.90.

USDJPY

Author

Yuri Papshev

Yuri Papshev

Independent Analyst

Independent trader and analyst at Forex market. Trade experience - more than 10 years. In trade Yuri Papshev uses a combination of fundamental and technical analysis.

More from Yuri Papshev
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD holds steady below 1.1800

EUR/USD moves sideways in a narrow channel below 1.1800 as the market volatility remains low ahead of the New Year holiday. On Tuesday, investors will pay close attention to the minutes of the Federal Reserve's December policy meeting.

GBP/USD retreats below 1.3500 as trading conditions remain thin

GBP/USD corrects lower after posting strong gains in the previous week and trades below 1.3500 on Monday. With the action in financial markets turning subdued following the Christmas holiday, however, the pair's losses remain limited.

Gold holds above $4,300 after profit taking kicked in

Gold retreats sharply from the record-peak it set at $4,550 and trades below $4,400, losing more than 3% on the day. Growing optimism about a Ukraine-Russia peace agreement and profit-taking ahead of the New Year holiday seem to be causing XAU/USD to stay under heavy bearish pressure.

Bitcoin, Ethereum, and XRP bulls regain strength

Bitcoin, Ethereum, and Ripple record roughly 3% gains on Monday, regaining strength mid-holiday season. Despite thin liquidity in the holiday season, BTC and major altcoins are regaining strength as US President Donald Trump pushes peace talks between Russia and Ukraine. The technical outlook for Bitcoin, Ethereum, and Ripple gradually shifts bullish as selling pressure wanes.

Economic outlook 2026-2027 in advanced countries: Solidity test

After a year marked by global economic resilience and ending on a note of optimism, 2026 looks promising and could be a year of solid economic performance. In our baseline scenario, we expect most of the supportive factors at work in 2025 to continue to play a role in 2026.

Crypto market outlook for 2026

Year 2025 was volatile, as crypto often is.  Among positive catalysts were favourable regulatory changes in the U.S., rise of Digital Asset Treasuries (DAT), adoption of AI and tokenization of Real-World-Assets (RWA).