Later in the session on Monday, US factory orders will draw interest amid growing stagflation fears. Economists forecast factory orders to fall 5.2% month-on-month in June after surging 8.2% in May.
A larger-than-expected fall in orders could fuel stagflation jitters and raise bets on a September Fed rate cut. A more dovish Fed policy stance may push USD/JPY toward the 50-day Exponential Moving Average (EMA). A drop below the 50-day EMA could expose the crucial 145 support level.
Conversely, an unexpected rise in orders may temper expectations of a Fed rate cut, lifting the pair toward the 200-day EMA. A break above the 200-day EMA may pave the way to the 149.358 resistance level.
USD/JPY: Key Scenarios to Watch
Bearish USD/JPY Scenario: hawkish BoJ rhetoric, weaker US factory orders, dovish Fed signals. Such factors could send USD/JPY toward the 50-day EMA, potentially exposing the 145 level.
Bullish USD/JPY Scenario: Dovish BoJ signals, strong US factory orders, hawkish Fed rhetoric. These may drive the pair toward the 200-day EMA and potentially the 149.358 resistance level.
