Trading idea for USD/JPY on September 27
USD/JPY maintains its uptrend and is testing the upside resistance at 149.00 on Wednesday. The pair is updating the October 2022 highs on the back of a stronger dollar.
Despite the fact that the Fed decided not to raise the rate in September, the regulator made it clear that until inflation reaches the target level of 2%, the "hawkish" course of monetary policy will be maintained. Moreover, the majority of the members of the Federal Open Market Committee (FOMC) adhere to this position. In particular, the head of FRB Minneapolis Neel Kashkari notes the stability of the national economy and considers it necessary to hold another rate hike of 25 basis points this year. Head of FRB Chicago Austan Goolsbee calls inflation the most serious problem for the Fed.
At the same time, the Bank of Japan maintains a soft monetary policy stance, ignoring rising inflation. The fact that negative interest rates will be maintained was announced last week by the head of the regulator Kazuo Ueda. At the same time, he did not rule out the possibility of currency intervention in case of further weakening of the yen.
Earlier analysts predicted that the Bank of Japan will intervene in forex trading once USD/JPY reaches 145.00. Now they consider the 150.00 level as a new boundary.
As long as USD/JPY has not reached the critical mark, the growth will continue. In this regard, we propose to place a buy order on USD/JPY
- Buy-limit 148.50
- take-profit 150.50
- stop-loss 147.80