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Is 148.20 a trap for USD/JPY or a springboard?
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Hello everyone, today XM Forex will bring you "[XM Forex Platform]: Is 148.20 a trap for the US dollar/yen or a springboard?". Hope it will be helpful to you! The original content is as follows:
On Thursday (September 4), the US dollar/JPY recurred around the 148.20 line during the early trading session of Europe. The stable operation of the equity market weakened the demand for safe-haven buying, and interest rate spread expectations and domestic political uncertainty jointly suppressed the yen. But the market still expects the Bank of Japan (BoJ) to normalize policy underpinned by wage resilience, inflation stickiness and improved outlook. At the same time, the Federal Reserve's bets that are expected to cut interest rates this month limit the rise of the US dollar, causing the exchange rate to repeatedly pull around the upper resistance.
Brief Introduction
Bank of Japan Deputy Governor Ryozo Himino said on Tuesday that global uncertainty is still high and the central bank is not in a hurry to significantly raise the still low financing costs; in contrast, Governor Ueda made it clear on Wednesday that if the economy and prices advance according to the central bank's outlook, they will prepare to continue to raise interest rates. The market bets that interest rate hikes may still be raised again this year, which will provide some support for the yen during Thursday's Asian session. Meanwhile, the ruling party secretary-general Hiroshi Moriyama expressed his intention to leave, which sparked doubts about Prime Minister Shiro Ishiba's leadership. Fiscal sustainability concerns heated up, with 30-year Japanese Treasury bond yields rising above 3% earlier this week and hitting record highs.
In the United States, the JOLTS job vacancy announced by the Bureau of Labor Statistics on Wednesday showed that the vacancies at the end of July were 7.18 million, and the previous value was revised down to 7.35 million, lower than the market expectations of 7.40 million. The soft data has further bet that the market will further downgrade interest rates at the Fed's interest rate meeting on September 17, and accumulate at least two interest rate cuts of 25 basis points each this year. Next, ADP Private Sector Employment and ISM Services PMI on Thursday, and non-farm employment (NFP) on Friday will dominate the US dollar rhythm, and inject new momentum into the exchange rate.
Technical aspect:
From the 4-hour K-line chart, the middle rail of the Bollinger band is at 147.774, the upper rail is at 149.133, and the lower rail is at 146.415. Recently, the K-line has once risen to 149.134 and falls back rapidly, forming a "top retracement" to the upper track; the current price is about 148.20, above the middle track and below the upper track, indicating that the trend is relatively neutral but is facing upper edge suppression. Bollinger bandwidth has expanded moderately, showing that volatility has rebounded from low levels but has not entered the acceleration phase.
In terms of price level, 148.773 is the first obstacle above, and above is the strong obstacle area of 149.133, further looking at 149.50; the lower support focuses on the horizontal dense area of 148.00 and the support near the Bollinger middle rail of 147.774, with strong support in the area around 146.659/146.574 and Bollinger lower rail of 146.415.
In terms of indicator resonance, MACD shows DIFF=0.234, DEA=0.252, with a slight "dead cross" above the zero axis, the bar chart is -0.037 and narrows, indicating that the kinetic energy is in oscillation repair; RSI(14) is about 55.697, which is strong but not overbought. According to xm-links.comprehensive judgment, if the exchange rate is in the box with a 146.8-149.1, if it cannot effectively break through and stand firm in the upper track, the short-term tends to be the mean regression path of "retracement-retrieval of the middle track".
Future Outlook
—Short-term (next week): Before NFP, the exchange rate is likely to maintain oscillation in the Bollinger band. If the upward breakthrough is 149.133 and effectively stabilizes with two to three 4-hour K-lines, and the MACD column turns red and expands, the market can enter the "breakthrough-back-test-extension" stage, pointing to the expansion area above 149.50; if the upward attack is blocked and the RSI shows a top divergence near 60, the probability of the retracement pointing to 148.00/147.774 is higher.
—Bolster scenario: The equity market is stable, the NFP is not weak, the BoJ tone is cautious and the progress is slower than pricing, the probability of the exchange rate breaking 149.13 and extending increases, but beware of the resistance clusters of 149.50-150 and false breakthroughs.
—Short scenario: US data weakens and Fed releases more clearly foreclosed easing. At the same time, BoJ emphasizes "to advance normalization as scheduled", then interest rate spreads converge and risk appetite decline resonate, and the exchange rate may fall below 148.00 and test 147.774; if MACD zero axis crossing and RSI fall below 50, the downward segment is expected to be confirmed.
The above content is all about "[XM Forex Platform]: Is 148.20 a trap or a springboard for USD/JPY?", which was carefully xm-links.compiled and edited by the editor of XM Forex. I hope it will be helpful to your transactions! Thanks for the support!
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