Usdjpy Bullish Trend Paused

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Usdjpy Bullish Trend Paused

Usd/Jpy Bullish Trend Has Paused

UOB Group's analyst believes that the bullish trend in USD/JPY has paused for now. This can be confirmed by looking at the USD/JPY price action, which shows range trading.

The key reason why USD/JPY is stalling is that the USD strength has taken a pause for now. On the other hand, the JPY is also not that strong, which led to range trading in the pair.

Usd/Jpy Stuck In Range Trade

In the next 1-3 months, the USD/JPY is expected to trade in the 145.00 - 150.00 range. As of now, the pair is trading in the middle of the range with a possibility to go either way.

But in the short term, the outlook for USD/JPY remains fixed. Once again, the reason for this is the weakness in the US Dollar, which has led to range trading in the pair.

That's why UOB Group believes that the pair is likely to trade between 147.00 - 149.00 in the short term. A resurgence in the US Dollar strength could push the pair towards the 150.00 resistance level.

On the way lower, the most probable support for the pair is found at the 145.00 handle. This is a very solid level and will likely contain any JPY strength.

However, the 145.00 could break if an event forces the investors to go towards the safe haven assets. In that case, preference will be given to the JPY as compared to the US Dollar.

But another angle to consider is the interest rate differential between the USD and the JPY. For now, the interest rate difference favors the USD as compared to the JPY.

Even if we get more rate cuts from the US Federal Reserve, the interest rate in the USA will still be higher than the Japan. So, as far as that is concerned, the path of least resistance for the USD/JPY is higher.

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