Later in the session on Monday, FOMC members’ reactions to last week’s US economic data will be crucial.
Calls to delay monetary policy easing to better assess the impact of tariffs on inflation could sink Fed rate cuts. A less dovish Fed rate path may drive USD/JPY toward the 200-day Exponential Moving Average (EMA). A break above the 200-day EMA could bring the 149.358 resistance level into play.
However, support for further policy easing to bolster the labor market may pave the way to the 50-day EMA. A break below the 50-day EMA would expose the crucial 145 support level.
USD/JPY: Key Scenarios to Watch
Bearish USD/JPY Scenario: Upbeat Japanese data, hawkish BoJ rhetoric, or dovish Fed rhetoric. These factors could push USD/JPY toward the 50-day EMA, bringing the 145 level into sight.
Bullish USD/JPY Scenario: Dovish BoJ signals, weak Japanese data, or hawkish Fed rhetoric. These factors may send the pair above the 200-day EMA, supporting a move toward the 149.358 resistance level.
