- In the first trading session of 2025, the USD/JPY pair continued its uptrend, reaching the resistance level of 157.77 before stabilizing around 157.18 at the time of writing.
- Overall, the US dollar remains the strongest as the US Federal Reserve signaled a more cautious stance on interest rate cuts amid continued inflationary pressures.
- In addition, there are growing expectations that Trump’s upcoming policies will support economic growth and halt monetary policy easing, which could support a stronger path for the US dollar.
The Bank of Japan’s cautious stance continues to weigh on the yen
According to Forex trading and through trusted platforms of trading companies, the Bank of Japan’s ability to take advantage of the challenges depends on adopting a more decisive policy. A reluctance to raise interest rates could erode the yen’s appeal, exacerbating its suffering. However, if the central bank takes a more proactive stance, there could be a positive shift in the Japanese yen’s performance. In general, the performance of the USD/JPY pair reflects global economic changes and monetary policy challenges, which requires close monitoring of economic data and central bank actions.
However, in the absence of decisive action by the Bank of Japan, pressure on the Japanese yen may continue. Meanwhile, any easing by the US Federal Reserve could lead to fundamental changes in the pair’s path.
Trading Tips:
Note that the rise in the US dollar may continue for some time, pending a reaction to Trump’s policies. The yen will remain in decline until the Japanese intervene in the markets if that happens
USD/JPY technical analysis and expectations today:
Based on the performance on the daily chart above and according to today’s gold analyst forecasts, the overall trend of the USD/JPY pair remains bullish. As mentioned earlier, the bulls have a good chance to push the pair towards the psychological resistance level of 160.00 if its current bullish factors continue. From that peak and its proximity, we can see more and more talk of imminent Japanese intervention in the foreign exchange markets to control prices. If this happens, it could lead to profit taking for the USD/JPY pair. The pair keeps trading above the 200-day moving average (EMA) near the 150.00 level, which has emerged as a major long-term support. Also, performance will remain positive as long as there are driving factors for both bears and bulls. Technically, volatility indicators such as the Relative Strength Index and Stochastic Oscillator are still up and have opportunities to go higher before reaching overbought levels.
Conversely, and in the same time frame, the first breakout of the uptrend requires the bears to move the USD/JPY pair towards the 155.30 and 153.80 support levels, respectively. Overall, the chart of the USD/JPY pair reveals a clear slowing of the upward momentum, as the current levels offer an opportunity for investors to reassess their positions. As we move into 2025, volatility remains high, requiring cautious trading strategies.
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