19.11.202413:29 Forex Analysis & Reviews: USD/JPY: Analysis and Forecast

Today, the Japanese yen is losing most of its intraday gains against the U.S. dollar. Uncertainty about the timing of the next interest rate hike by the Bank of Japan, combined with risk-averse market sentiment, are the key factors undermining the safe-haven yen. Meanwhile, a slight decline in the U.S. dollar index has contributed to an intraday rebound of approximately 50 points from levels just below 154.00.

There is speculation that U.S. President-elect Donald Trump's widely discussed policy agenda may be inflationary and could limit the Federal Reserve's ability to further ease monetary policy. This possibility has paused the decline of the U.S. dollar from its yearly high, reached last week, thereby providing support for the USD/JPY pair. However, speculation that Japanese authorities might intervene in the currency market to support the yen, alongside geopolitical risks and the easing of U.S. Treasury bond yields, is helping to limit the yen's losses.

From a technical perspective, the inability of the USD/JPY pair to strengthen above the psychological level of 155.00 signals caution for bullish traders. Support for spot prices is near the 153.85 level, aided by positive oscillators on the daily chart. Further selling could pave the way for additional losses toward the 61.8% Fibonacci retracement level, heading toward the round 153.00 level and the next significant support level at 152.60. A convincing breakout below this level would expose a key technical point—the resistance break at the 200-day simple moving average (SMA). This SMA has now turned into support and currently stands just below the round 152.00 level.

On the other hand, the psychological level of 155.00, followed by the high of yesterday's daily candle at around 155.32, serves as immediate resistance. Sustained strength beyond this point would confirm short-term positive prospects, allowing the USD/JPY pair to overcome the intermediate barrier at 155.70 and aim for the round 156.00 level. Momentum could then extend further toward testing the multi-month high at around 156.75, which was reached last Friday.