The USDJPY currency pair was trading up slightly as the currency pair struggled to rally higher as the US dollar and Japanese yen remained equally matched. However, the US dollar’s lack of momentum kept the currency pair trading sideways for the second consecutive day.
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The pair attempted to rally higher during yesterday’s session after the release of primarily dovish meeting minutes from the Bank of Japan’s latest monetary policy meeting, which indicated that the new BoJ Governor was carrying forward the dovish policies of his predecessor.
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Despite the dovish nature of the April meeting, Ueda’s first meeting and former Governor Kuroda’s last monetary policy meeting, the BoJ kept interest rates intact but promised to start normalising rates gradually.
Both currencies lacked momentum despite the US dollar rallying against its peers, including the euro, British pound, Australian dollar and the New Zealand dollar. However, despite the lack of momentum, the USDJPY currency pair has a bullish outlook, with the dollar as the favourite.
The US dollar has been trading near its 2023 lows, which also doubled up as its lows from April 2022, and the conditions on the US Dollar Index indicate that the dollar is oversold. Therefore, investors are betting that the dollar will recover and rally higher.
On the other hand, the USDJPY currency pair is trading in the middle of a wide range and is above a short-term support level, which increases the likelihood that it will rally along with the confluence witnessed on the DXY chart.
Therefore, most analysts and investors are betting on a rally higher and a stronger dollar in the next few days. Most investors are also looking forward to the critical US inflation data due tomorrow, which could determine the future direction of the currency pair.
If the US inflation data is positive, the USDJPY currency pair will likely rally higher with the dollar, which could see the pair rally to new highs. Analysts and investors agree that the USDJPY currency pair will head higher tomorrow.
*This is not investment advice.
The USDJPY price chart.
The USDJPY currency pair was trading up 9.4 pips (0.07%) as the pair struggled to rally higher.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.