The BoJ is expected to maintain lower interest rates compared to the Federal Reserve throughout 2024, which continues to pressure the yen.
Key Points
- USD/JPY closed at 161.706 on Wednesday, slightly up by 0.15%.
- Today, USD/JPY opened at 161.624 and dropped to 161.131, reflecting a 0.36% decline.
- No high-impact data today; tomorrow’s anticipated NFP data could influence USD/JPY.
USD/JPY Daily Price Analysis – 04/07/2024
On Wednesday, USD/JPY closed at 161.706, slightly up by 0.15% from its opening price of 161.440. Despite the modest gain, the yen remained weak due to strong fundamentals favoring the dollar. The pair approached its lowest level since December 1986, highlighting persistent yen weakness amid expectations of potential intervention by Japanese authorities, which did not materialize due to insufficient volatility.
Today, USD/JPY opened at 161.624 and has since declined to 161.131, marking a 0.36% drop. The dollar’s weakness today offers some relief to the yen, though it remains under pressure. This movement reflects traders’ anticipation of Japanese government intervention, especially during the low liquidity period around the U.S. Independence Day holiday.
The BoJ is tipped to keep rates pinned lower than the Federal Reserve for all of 2024, which is capping losses in the dollar. And the yen is also undermined by a divergence in Japanese and U.S. interest rate policies that is not about to quickly narrow, which points towards further falls for the yen. Traders are closely watching for any signs of intervention, although significant moves are required to trigger such actions.
Key Economic Data and News to Be Released Today
Today, there is no high-impact economic data due to be released. Nevertheless, the market is awaiting the U.S. Non-Farm Employment Change tomorrow. The previous value was 272K; the expected data is 194K.
The release is of high importance because of the substantial impact on market sentiment that result may have, and if the actual data is too far from expectation, it might affect the movements of the USD/JPY pair. The better-than-expected NFP might strengthen the dollar, and the weaker-than-expected result could relieve the yen in the short term.
USD/JPY Technical Analysis – 04/07/2024
USD/JPY is currently trading below the 200 EMA, indicating a bearish trend in the short term. The price has been declining steadily after opening at 161.624 today, now at 161.105, reflecting a 0.36% drop.
The RSI is at 31.77, which is close to the oversold territory. With 200 EMA suggesting the bearish trend and RSI almost oversold we might expect price to continue down in the short term. If the RSI reaches even further into oversold we may get a relief bounce or consolidation as traders take profits or new buyers come in.
USD/JPY Fibonacci Key Price Levels 04/07/2024
Short-term traders planning to invest in USD/JPY today should keep a close eye on the following key price levels for the day:
| Support | Resistance |
| 161.026 | 161.926 |
| 160.748 | 162.204 |
| 160.289 | 162.654 |
Risk Disclosure: The information provided in this article is not intended to give financial advice, recommend investments, guarantee profits, or shield you from losses. Our content is only for informational purposes and to help you understand the risks and complexity of these markets by providing objective analysis. Before trading, carefully consider your experience, financial goals, and risk tolerance. Trading involves significant potential for financial loss and isn't suitable for everyone.
