- The USD/JPY pair hovered below 149.00 again on Friday as risk appetite returns to balance.
- The US dollar is under selling pressure across the board heading into the end of the trading week.
- Next week: inflation data from Japan and the start of the season in Jackson Hole.
USD/JPY fell on Friday, falling below 149.00 earlier in the day and testing near 148.00. The US dollar is selling across the board as broad market sentiment improves on the back of rising US consumer sentiment.
The University of Michigan Consumer Sentiment Index showed a stronger-than-expected recovery in surveyed consumer outlooks in August, rising to 67.8 from a previous 66.4, comfortably beating the 66.9 forecast. Investors seized the headline and reinvested in risk assets while selling the UoM dollar, even as UoM’s five-year inflation expectation held steady at 3% in August and UoM’s current consumer conditions forecast dipped slightly, falling from 62.7 to 60.9, completely reversing the 63.1 forecast.
The next week will start with a serene economic calendar, with the most significant event for the yen being inflation data from the Japanese Consumer Price Index (CPI), while US investors will focus on the start of the Jackson Hole Economic Symposium later this week.
USD/JPY Price Forecast
Friday’s decline in USD/JPY bids brought the pair back below the rising trendline on the daily candles, but price action continues to drift toward the upper end as buyers take a break. USD/JPY continues to trade south of the 200-day exponential moving average (EMA) near 151.67, and an ill-timed breakout of bullish pressure could see another low technical leg form as bids struggle with technical levels below 149.00 during the day.
