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USD/JPY Price Forecast: Climbs back above mid-160.00s as BoJ rate decision looms

  • USD/JPY attracts some buyers on Friday and moves away from a two-and-a-half-month low.
  • A modest USD strength acts as a tailwind for spot prices as focus remains on the BoJ decision.
  • The bearish technical setup backs the case for the emergence of fresh selling at higher levels.

The USD/JPY pair is seen building on the previous day's late recovery from sub-158.00 levels, or the lowest since May 14, and gaining positive traction during the Asian session on Friday. Spot prices climb back above the 160.50 level amid the emergence of some US Dollar (USD) buying and some repositioning trade ahead of the highly anticipated Bank of Japan (BoJ) rate decision.

From a technical perspective, strength beyond the 160.00 psychological mark and the 38.2% Fibonacci retracement level of the sharp corrective pullback from a four-decade peak backs the case for further intraday gains. However, the 14-period Relative Strength Index (RSI) near 31 and a negative Moving Average Convergence Divergence (MACD) reading around -0.43 suggest lingering downside pressure.

Hence, any further move up is more likely to confront stiff resistance near a dense Fibonacci band led by the 50.0% retracement at 160.99 and further capped by the 61.8% and 78.6% retracements at 161.69 and 162.69, respectively. Bulls would need to clear the said barriers to ease immediate pressure and pave the way for a rise back towards the cycle high region at 163.97.

On the downside, initial support is seen at the 38.2% Fibonacci retracement at 160.28, ahead of the 23.6% level at 159.41 and the structural swing low zone at 158.00. A convincing break and acceptance below the handle will be seen as a fresh trigger for bearish traders and pave the way for an extension of the suspected intervention-led corrective decline.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

USD/JPY 4-hour chart

Chart Analysis USD/JPY

Japanese Yen Price This week

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the US Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-1.01%-0.86%-1.85%-0.51%-0.33%-1.02%-1.15%
EUR1.01%0.14%-0.83%0.52%0.70%-0.01%-0.14%
GBP0.86%-0.14%-1.06%0.39%0.56%-0.15%-0.28%
JPY1.85%0.83%1.06%1.33%1.52%0.81%0.59%
CAD0.51%-0.52%-0.39%-1.33%0.15%-0.51%-0.65%
AUD0.33%-0.70%-0.56%-1.52%-0.15%-0.70%-0.84%
NZD1.02%0.00%0.15%-0.81%0.51%0.70%-0.14%
CHF1.15%0.14%0.28%-0.59%0.65%0.84%0.14%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?
The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.
9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?
The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.