USD/JPY analysis on March 25, 2024
On Monday, USD/JPY demonstrates multidirectional dynamics, and is trading near the 151.30 mark: without retreating from the zone of local highs in November 2023 after the dollar received support on weakening expectations of a reduction in the cost of borrowing by the Fed in the near future. Investors are also paying attention to the growth of the index of business activity in the manufacturing sector from S&P Global from 52.2 points to 52.5 points, which exceeded analysts' forecasts of 51.7 points.
The yen remains under pressure after the Bank of Japan's historic decision to abandon its negative interest rate policy. Although the regulator's rhetoric remains soft, markets do not expect it to change the course of monetary policy in the near future. Statistical data also do not stimulate the strengthening of the national currency. The consumer price index rose from 2.2% to 2.8% in February, but excluding food and energy prices, it fell from 3.5% to 3.2%. A Reuters poll of leading economists shows that more than half of respondents expect the Bank of Japan to raise the rate by 25 basis points at least once more during the year.
On Friday, March 29, data on consumer inflation in the Tokyo region for March, as well as February statistics on retail sales and industrial production, will be published. Forecasts suggest an increase in retail sales from 2.3% to 3.0%.
USD/JPY Technical analysis
On the daily chart, the Bollinger Band indicator shows a steady increase. The MACD is showing some signs of decline, but still holds a buy signal. Stochastic is testing the 80% level from top to bottom and may exit the overbought area.
We will consider sales after breaking down the level of 151.00. We consider the key level of 150.00 to be the nearest target. We will place a stop loss at 151.50.
A rebound from the support of 151.00 followed by an upward breakout of the 151.50 mark will be a signal to buy the pair with a target of 152.50. We will place the stop loss of the transaction at 151.00.