USDJPY:
The Japanese yen (JPY) continued to strengthen against its U.S. counterpart for the second consecutive day on Tuesday and pushed the USD/JPY pair away from the highest level since August 16, reached the previous day. Overnight comments from Japanese officials revived fears of intervention and proved to be a key factor supporting the yen. This, along with the risk of further escalation of geopolitical tensions in the Middle East, is encouraging some safe haven flows towards the JPY.
Nevertheless, the reduced chances of another interest rate hike by the Bank of Japan (BoJ) in 2024 may deter JPY bulls from aggressive betting. Meanwhile, Friday’s US jobs report led investors to lower their bets on another significant interest rate cut by the Federal Reserve (Fed) in November, allowing the US Dollar (USD) to hold near a seven-week high. This, in turn, could provide some support to the USD/JPY pair and limit further declines.
From a technical perspective, any further decline could be seen as a buying opportunity and is likely to remain contained near 147.00, which should now act as a key pivot point.
Trading recommendation: Trade predominantly with Sell orders from the current price level.
Origin: FreshForex
