USD/JPY Rises on Risk Appetite, Dollar Strength.
USD/JPY rises as stronger risk appetite and a firm U.S. Dollar pressure the Yen
FUNDAMENTAL OVERVIEW:
The Japanese Yen (JPY) weakened against the U.S. Dollar (USD) on Friday, as improved risk sentiment and widening interest rate differentials continued to weigh on the Yen.
USD/JPY climbed back above 147.00, with immediate resistance at the June swing high of 148.03. Investors are closely watching monetary policy divergence ahead of next week’s Federal Reserve (Fed) and Bank of Japan (BoJ) meetings, with the Fed expected to maintain its higher-for-longer stance, while the BoJ remains cautious amid signs of cooling inflation.
Japan’s July Tokyo CPI came in slightly below expectations, with both headline and core inflation easing to 2.9% from 3.1%, reinforcing expectations that the BoJ will delay any near-term policy shift. This added further support to USD/JPY.
Markets are also digesting Friday’s U.S. Durable Goods Orders data for June. While the report showed a sharp 9.3% monthly drop—following May’s large 16.5% surge—the decline was smaller than expected, helping limit negative market reaction.
USD/JPY TECHNICAL ANALYSIS CHART:
Technical Overview:
USD/JPY is trading within an up channel.
USD/JPY is moving above all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in Buying Zone, while the Stochastic oscillator suggests Positive trend.
Immediate Resistance level: 148.99
Immediate support level: 147.54
HOW TO TRADE USD/JPY
On the higher timeframe, USD/JPY sharply declined before finding support and reversing to the upside. The pair has since entered a consolidation phase but is now displaying strength and bullish momentum. It recently broke above a key resistance level and is trading higher. If it holds above this breakout zone, further upside potential remains likely.