Later in the session on Wednesday, FOMC members’ speeches will face increased scrutiny. The spotlight is on the Fed after President Trump’s recent attempt to fire Fed Governor Lisa Cook. While Fed Chair Powell hinted at a potential September Fed rate cut, economists remain uncertain about the Fed rate path through Q4.
Support for multiple Fed rate cuts could weigh on the US dollar, pushing USD/JPY toward the 50-day Exponential Moving Average (EMA). If breached, 145 would be the next key support level. On the other hand, calls to delay policy easing because of elevated inflation may drive the pair above the 200-day EMA, opening the path toward the 149.358 resistance level..
USD/JPY: Key Scenarios to Watch
Bearish USD/JPY Scenario: Hawkish BoJ guidance or dovish Fed rhetoric could drag USD/JPY toward 145.
Bullish USD/JPY Scenario: Dovish BoJ chatter or hawkish Fed signals may send the pair toward the 150.
