Daily Technical Analysis on USD/JPY: Lots of speculation awaiting US growth and inflation data


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The currency pair is currently overbought, and a downtrend may occur. However, investors should know what may happen in the coming days. The Bank of Japan (BoJ) was cautious this week and did not change its economic policy. Instead, it is believed that the BoJ will let the Federal Reserve (Fed) take the spotlight.

Japan’s exports have posted positive numbers along with the Nikkei index. Although the Yen has lost value, it is not something that concerns the Bank of Japan for now as inflation has moderated in the country and remains under control for now. In addition, having a currency that is losing value has served the bank to motivate exporting companies along with registering better numbers in the primary stock market index.

Technical Analysis USD/JPY today, January 25

The price of USD/JPY has changed a bit, moving between the levels of 148.000 and 149.000 in recent weeks. If the pair breaks this barrier with an upward trend and reaches above 150.000, the Bank of Japan will likely intervene to stabilize its economy. If it goes down, the trend will most likely find resistance at 14.000.

Traders of this pair should remember that this week’s U.S. Gross Domestic Product (GDP) data will be released, which may affect the relationship between these two currencies either positively or negatively. For example, if inflation is lower than expected, the market could be stimulated, generating more sales orders. If inflation is higher, overbought conditions may continue in the market.

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