Later in the session on Monday, the Chicago Fed National Activity Index and Dallas Fed Manufacturing Index could influence sentiment toward the US economy.
Economists forecast the Chicago Fed National Activity Index to fall from -0.1 in June to -0.2 in July. Meanwhile, economists expect the Dallas Fed Manufacturing Index to drop from +0.9 in July to +0.2 in August.
Weaker-than-expected numbers may boost expectations of a September Fed rate cut and further policy easing in Q4. A more dovish Fed policy stance could send USD/JPY toward the 50-day Exponential Moving Average (EMA). A drop below 50-day EMA may expose the crucial 145 support level.
On the other hand, stronger figures may drive the pair toward the 200-day EMA, bringing the 149.358 resistance level into sight.
USD/JPY: Key Scenarios to Watch
Bearish USD/JPY Scenario: Strong Japanese data, hawkish BoJ signals, weaker US data, or dovish Fed chatter. These factors could push USD/JPY toward 145.
Bullish USD/JPY Scenario: Weak Japanese data, dovish BoJ chatter, strong US data, or hawkish Fed rhetoric. These factors may drive the pair toward the 150.
