Technical Outlook
Support Levels:
• 142.35
• 141.97
• 140.45
Resistance Levels:
• 143.37
• 143.75
• 145.35
Indicators:
• RSI (14): Neutral (~37), indicating the potential for a correction
• MACD: Bearish
• Moving Averages (20, 50, 100-day): All signaling sell
The USD/JPY pair is exhibiting a short-term downward trend, with prices trading below key moving averages. Technical indicators suggest the possibility of a corrective rebound before any further decline.
Fundamental Developments
• Japan's Economic Indicators: Japan's Leading Economic Index for March was revised up to 108.1, suggesting a positive economic outlook.
• Bank of Japan Policy Outlook: Persistent inflation, with core inflation accelerating to 3.5%, has heightened expectations that the Bank of Japan may proceed with rate hikes.
• US Fiscal Concerns: Moody's downgraded the US credit rating from AAA to AA1, citing increasing debt-to-GDP projections. This development has weakened the US dollar, supporting yen strength.
Weekly Outlook & Strategy
• Bullish Scenario: A sustained move above 143.37 could lead to a test of 143.75 and potentially 145.35.
• Bearish Scenario: Failure to hold above 142.35 may result in a decline towards 141.97 or even 140.45.
• Neutral Scenario: The pair may consolidate between 142.35 and 143.75 before determining its next directional move.
Key Events to Watch This Week
• 28 May (Wednesday):
• Japan's Retail Sales Data
• US Durable Goods Orders
• 29 May (Thursday):
• US Initial Jobless Claims
• US GDP Second Estimate
• 30 May (Friday):
• Japan's Industrial Production Data
• US Core PCE Price Index