The currency pair USDJPY has consolidated above 138. Previously, there were several trading sessions to test this level. A rise in the dollar against all other currencies confirmed the uptrend in the currency pair. Now the scenario of accelerated growth is possible. Fundamentals are in favor of this development.
The situation with the U.S. government debt continues to be acute. Market concerns are getting stronger every day resulting in the dollar’s rise. The closer to the day of a potential default, the more volatile the financial markets will be.
On Wednesday, U.S. Treasury Secretary Janet Yellen reiterated that early June is the deadline for making a decision on the government debt. She will soon present an update on the government’s financial situation to Congress.
White House officials and top Republican in Congress Kevin McCarthy held a meeting on Wednesday. Both sides considered the negotiations productive, but no consensus on the debt ceiling has been reached yet.
One of the indicators of the global economy's state is copper that is now at its lows of 2023. Analysts project a further decline of the metal in the short term. An approaching recession is a bullish driver for the dollar’s growth against world currencies.
By now, copper has significantly lost in price, and ING analysts forecast an even greater decline in the near future. The price of the red metal will still depend on the rate of China’s economic recovery and the U.S. Federal Reserve (Fed) monetary policy.
According to the technical analysis, the currency pair USDJPY is at its highest since December 2022. An important resistance level has been overcome, so the likelihood of the continued movement is high. The growth target might be set at 142. This is the level of the previous high in November last year. A Stop-loss will be placed at the reverse movement below the former resistance level, which corresponds to the price of 137.5. In this case the dollar’s accelerated growth scenario is postponed.
The currency pair USDJPY is likely to rise:
Take profit – 142.0
Stop-loss – 137.5
This content is for informational purposes only and is not intended to be investing advice.
