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FxWirePro: USD/JPY biased higher but rally currently stretched

• USD/JPY edged higher as supported by a more hawkish tilt from the Federal Open Market Committee, elevated U.S. Treasury yields, and a continued rally in oil prices.

• Higher yields in the U.S. widen the interest rate differential with Japan, where monetary policy remains ultra-loose, making the dollar more attractive relative to the yen.

• Energy markets have added another layer of support for USD/JPY. Brent crude prices have surged to their highest levels since June 2022, driven by the ongoing U.S.-Iran impasse and supply concerns. 

• Rising oil prices tend to weigh on the yen, as Japan is a major energy importer, thereby increasing demand for dollars to pay for imports.
 
• Immediate resistance is located at 160.64(23.6%fib), any close above will push the pair towards 160.88(Higher BB).

•  Support is seen at 159.37 (SMA 20) and break below could take the pair towards 159.01(38.2%fib ).

Recommendation: Good to buy  around 160.40, with stop loss of 159.60 and target price of 161.00
 

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