On Friday, the US dollar is rising against major currencies amid the strong US economic data. These indicators raise concerns that the Federal Reserve (Fed) will maintain higher interest rates for an extended period.
The number of new jobless claims unexpectedly fell to the lowest level since February, as data released on Thursday showed.
In addition, several Fed officials expressed their views on the central bank's future monetary policy. Federal Reserve Bank of New York President John Williams kept his options open over future US interest rate policy. He acknowledged lowering inflation and a better balanced economy. These facts suggest there is no urgency for a rate rise later this month.
Dallas Federal Reserve Bank President Lorie Logan said that it "could be appropriate" to skip an interest-rate increase at the US central bank's upcoming meeting in September. However, more policy tightening will likely be needed to get inflation down to 2% in a timely way.
The USDJPY currency pair is trading well above the important technical level of 145.00. Last year, the yen's decline towards this level caused the Japanese authorities to intervene in the pricing of the national currency.
On Friday, Japanese Finance Minister Shunichi Suzuki, expressed dissatisfaction with the rapid fluctuations of the yen. He emphasized that such sharp movements of the currency are undesirable. The government is ready to consider various options to prevent unnecessary fluctuations. This new warning for investors, who were trying to sell the yen, did not significantly change the pair's upward movement.
The USDJPY pair is forming an upward corrective channel on the daily time frame.
In terms of wave analysis, the price is forming the second descending wave in the new series of waves, after the update of extremum points on the H1 timeframe.
The MACD indicator (standard values) shows divergence. This factor may create conditions for the transition of the second wave into the third ascending wave.
Signal:
The short-term outlook for the USDJPY currency pair is to buy.
The target is at the level of 148.60.
Part of the profit should be fixed near the level of 147.75.
A Stop-loss should be placed at the level of 145.65.
The bullish trend is of a short-term nature, so it is suggested to limit the trading volume to no more than 2% of your capital.
This content is for informational purposes only and is not intended to be investing advice.
