Exchange rate OANDA:USDJPY fell significantly on weaker U.S. nonfarm payrolls data on Friday, dampening prospects for the Federal Reserve to raise interest rates in the future.
The Japanese government recently released data showing that regular wages have increased the most in 28 years in May. This reinforces the belief that the Bank of Japan will have to adjust its loose monetary policy. However, as long as the Fed does not show any clear signs of abandoning interest rate hikes, the recovery of the yen will be limited.
OANDA:USDJPY has seen a technical correction downwards after reaching a key resistance level at 145,050. However, the downward correction is limited, and the currency pair is still operating within an upward price channel and above the Fibonacci retracement level of 0.618% and the moving average EMA21. This reinforces the bullish outlook for USDJPY and suggests that the main uptrend is not affected. As long as USDJPY remains within the price channel (a), any downward movements should be considered technical corrections. The possibility of a price decrease is further supported by the breaking of the uptrend, confirmed by the price action falling below the Fibonacci retracement level of 0.50%. Overall, USDJPY is expected to find support at the following notable technical levels: Support: 142,517 - 140,922 Resistance: 145,050 - 145,866
Very detailed work as always and love what you've done here with this post. Can't say that we agree with your bullish outlook for the JPY but if you're correct then well done!