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USD/JPY Price Analysis – Testing Resistance Amidst Low Volatility, US Core PCE Index Ahead

  • 3 mins read ●
  • Published:
usd jpy 2

JPY fell under pressure after the release of the Weighted Median Inflation Index data, which suggested a potential slowdown in the march toward the 2% inflation mark. As a result, we may see a lower-for-longer interest rate from the BoJ, which translates to persistent pressure on the JPY.

Key Points

  • USD/JPY suffered from low volatility on Monday as a result of the US public holiday.
  • Japanese Weighted Median Inflation Index data came in on Tuesday, signaling potential lower-for-longer rates.    
  • Key support and resistance levels are 156.529 and 157.198, respectively.

USD/JPY Daily Price Analysis – 28/05/2024

The pair lost some volatility on Monday during the United States public holiday. As a result, it moved only by 0.06% to the downside. Today, before the opening of the New York session, the market has pretty much remained unchanged, moving only by 0.01%.

In the early hours of Tuesday, Japan released the Weighted Median Inflation Index, falling below the 2% inflation target. This raises some questions about the BoJ’s potential to hike rates. Ultimately, this means that Japanese interest rates may remain lower for longer, putting pressure on the JPY in the foreign exchange market.

Japan Finance Minister Shun’ichi Suzuki then said on Tuesday that there’s a potential for intervention. However, Suzuki chose not to comment on whether intervention has occurred in the past.

The western part of the Atlas has been light on economic data for the United States. Yet, the Fed’s inflation gauge, Personal Consumption Expenditures (PCE) Price Index data, will be released on Friday, and the focus will be on that.

Technically, the pair has remained in the uptrend on the daily chart, according to the RSI and the Ichimoku indicators. The Ichimoku cloud floats underneath the price as dynamic support, and the Leading Span A is above Leading Span B. The pair is currently testing the resistance level 156.77.

USDJPY daily chart 2024-05-28
USDJPY Daily Chart – 28/05/2024

USD/JPY Intraday Technical Analysis – 28/05/2024

On the hourly chart, we see the consolidation that has taken over the market since last Thursday. On the resistance side, we have 157.198, and on the support side, we have 156.529. 

Before we hit that resistance, though, the 0.618 (157.034) fib retracement level comes up. Beyond those levels, the bulls will be looking to push the price high up to the 0.786 fib retracement level at 158.441.

On the support side, the 0.5 fib retracement level at 156.046 awaits the price below the 156.529 price point. And below those levels, we have the 0.382 (155.057) and 0236 (153.835) fib retracement levels.

USDJPY hourly chart 2024-05-28
USDJPY Hourly Chart – 28/05/2024

Key Economic Data and News to Be Released Today

The United States Consumer Confidence Index goes public today amidst a slew of speeches from notable Fed and BoJ officials. On Thursday, the US GDP figures go public alongside Initial Jobless Claims. In Japan, Tokyo Core CPI and Japanese Industrial Production also take center stage. On Friday, the Core PCE Price Index goes live.

Visit Our Economic Calendar

USD/JPY Key Fibonacci Price Levels 28/05/2024

Based on the 1hr chart, the key Fibonacci price levels for USDJPY are these:

SupportResistance
$156.046$157.034
$155.057$158.441
$153.835

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.

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