USD/JPY Price Forecast: Slides to 162.00 as constructive setup favors bulls before US CPI
- USD/JPY edges lower on Tuesday as the JPY draws some support from intervention risks.
- The USD bulls turn cautious ahead of the US CPI and Fed’s Warsh, and weigh on the pair.
- The downside seems limited amid a supportive fundamental backdrop and bullish setup.
The USD/JPY pair remains on the back foot through the first half of the European session on Tuesday. Intervention risks support the Japanese Yen (JPY) and act as a headwind for spot prices amid a softer US Dollar (USD). Spot prices, however, remain close to a four-decade high, touched earlier this month, as traders await US consumer inflation figures and Federal Reserve's (Fed) Kevin Warsh's inaugural congressional testimony.
In the meantime, the persistently wide interest rate gap between Japan and other major economies, including the US, continues to undermine the JPY amid economic concerns stemming from the Middle East crisis. Furthermore, escalating US-Iran tensions and firming Fed hike expectations, amid renewed inflation fears due to the closure of the Strait of Hormuz, help limit the USD losses and warrant some caution before placing bearish bets on the USD/JPY pair.
From a technical perspective, spot prices remain confined between two converging trend lines, forming a symmetrical triangle on the 4-hour chart. Against the backdrop of a strong rally from the May monthly swing low, the said triangle might be categorized as a bullish consolidation phase before the next leg up. Furthermore, a corrective pullback earlier this month showed resilience below the 200-period Exponential Moving Average (EMA) on the 4-hour chart.
Meanwhile, momentum indicators are relatively muted. In fact, the Relative Strength Index (RSI) is hovering near a neutral 52, and the Moving Average Convergence Divergence (MACD) is fractionally positive near the zero line, hinting at a cautious upside tone rather than an impulsive rally. Hence, it will be prudent to wait for a breakout through the triangle resistance, near 162.55-162.60, before positioning for any further appreciation for the USD/JPY pair.
On the downside, the latest close at 162.10-162.00 forms initial intraday support, ahead of the rising trend-line floor at 161.60 and the 200-period EMA clustered near 161.15. A convincing break and acceptance below the latter would be needed to signal a deeper corrective phase in the USD/JPY pair. Nevertheless, the broader technical setup suggests that the uptrend is still intact despite the latest consolidation.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
USD/JPY 4-hour chart
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.16% | -0.20% | -0.15% | -0.45% | -0.35% | -0.83% | -0.27% | |
| EUR | 0.16% | -0.03% | 0.04% | -0.29% | -0.18% | -0.66% | -0.10% | |
| GBP | 0.20% | 0.03% | 0.07% | -0.24% | -0.13% | -0.63% | -0.06% | |
| JPY | 0.15% | -0.04% | -0.07% | -0.31% | -0.23% | -0.71% | -0.16% | |
| CAD | 0.45% | 0.29% | 0.24% | 0.31% | 0.09% | -0.38% | 0.17% | |
| AUD | 0.35% | 0.18% | 0.13% | 0.23% | -0.09% | -0.48% | 0.10% | |
| NZD | 0.83% | 0.66% | 0.63% | 0.71% | 0.38% | 0.48% | 0.56% | |
| CHF | 0.27% | 0.10% | 0.06% | 0.16% | -0.17% | -0.10% | -0.56% |
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
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
