- USD/JPY trades nearly 145.00 after failure to profit over 146.20, exerted to a gentle American dollar and mixed US data.
- General expenses for households on the Japanese march increased by 2.10% y/y, overcoming expectations, while the American risk of staglation remain, as the FED officials warn against eternal inflation.
- Key technical levels include support at 144.82, 144.79 and 144.49, with resistance to 146.16, 146.31 and 148.30.
The USD/JPy pair went back in the direction of 145.00 after they did not expand the profits above almost one month 146.20 earlier on the same day. The retreat is reflected in the wider softening of the American dollar, which turned violently when investors again evaluate the US-UK trade agreement and looked at the future at critical negotiations in the US-Chin case this weekend in Switzerland. The American dollar indicator (DXY), which measures the value of USD in relation to the six main currencies, dropped to 100.30 after reaching the summit at 100.86, reflecting the growing skepticism of the market in connection with the strength of recent trade agreements in the US.
The US economic perspectives remain mixed, and FED officials emphasize the risk of staglation. Governor Barr recently noticed that higher tariffs may interfere with global supply chains, increasing inflation, potentially slowing down economic growth and increasing unemployment. Despite this, the GDPnow Fed Atlanta model maintained a solid estimate of Q2 growth to 2.30% Saar, reflecting a constant, though careful, optimism. However, the market remains cautious, and the last data suggest that the US economy may meet with significant layers of the head if commercial voltages escalate.
In Japan, the last data surprised the advantages, and the general expenditure of the household on the march increased by 2.10% y/y, far above the forecasts by 0.20% and rapidly reversing the decline from the previous month by -0.50%. This improvement of consumer expenditure is a positive sign for the Japanese economy, potentially reducing pressure on the Bank of Japan (BIJ) to intervene on the Jen market.
Technical analysis
USD/JPY is currently around 145.00, with bears reinforced with several key technical signals. The 50-day EMA on 146.16 and 50-day SMA at 146.31 both indicate inheritance pressure, like the 100-day SMA on 150.46 and 200 SMA days at 149.57, which remain strongly on the territory of sales. The 20-day SMA at 143.17 provides some support, but the shoot indicators are mixed, from RSI to 52.54 (neutral), and MacD flashes the buy signal.
Key level support levels are identified at 144.82, 144.79 and 144.49, while the resistance is 146.16, 146.31 and 148.30. The break below level 144.80 may cause a further defect, and recovery above 146.30 would be needed to confirm stubborn reversal.
