USD/JPY: JPY Maintains Upward Momentum

26 Jul

The Japanese Yen (JPY) continues its upward momentum against the US Dollar (USD) for the fourth consecutive session, reaching the 152.000 mark yesterday. This strength in the Yen is attributed to traders unwinding carry trades in anticipation of the Bank of Japan’s (BoJ) policy meeting next week.

The upcoming BoJ meeting is highly anticipated, with expectations of an interest rate hike. This speculation has led short-sellers to close their positions, bolstering the JPY. Additionally, the BoJ is expected to announce plans to taper its bond purchases, aiming to scale back its extensive monetary stimulus program.

Meanwhile, the US Dollar could find support as recent US PMI data showed a faster expansion in private-sector activity for July. This data highlights the robustness of US economic growth despite high interest rates, giving the Federal Reserve (Fed) more flexibility to maintain its restrictive policy stance if inflation does not ease.

Technical analysis suggests that the JPY/USD pair may continue its bearish trend, with potential support levels around 148.160 and further down at the demand zone of 142.210. These areas could provide solid entry points for traders anticipating a USD rebound.

Currently, we are not planning any trades but are monitoring the price movements towards these key levels for potential buying opportunities.


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