- USD/JPY attracts some buying on Tuesday and approaches one-month highs again.
- The dollar remains near two-decade highs and offers support amid elevated US bond yields.
- The policy divergence between the Fed and the Bank of Japan favors the bulls and supports the prospects for further gains.
The pair USD/JPY it reverses an intraday drop to the 137.00 level and is back close to the one-month highs reached this Tuesday at 137.71. The pair is now trading around 137.50 and is looking to consolidate its recent bull run of the last two weeks.
The US dollar hit a two-decade high amid Fed expectations, which turns out to be a key factor acting as a tailwind for the USD/JPY pair. Bullish traders took a cue from soaring US Treasury yields, causing the US-Japan rate spread to widen and undermining the Japanese yen. This, along with the policy divergence between the Fed and the Bank of Japan, favors the prospects for further appreciation in the short term.
Despite signs of easing in US inflation, recent statements by several Fed officials suggest that the US central bank will continue to tighten monetary policy to control inflation. By contrast, the Bank of Japan has repeatedly stated that it will maintain its ultra-easy monetary policy and remains committed to keeping the 10-year Japanese government bond yield around 0%. This, in turn, reaffirms the positive short-term outlook for the USD/JPY pair.
However, traders might refrain from making aggressive bullish bets and would rather wait for a tougher message from Fed Chairman Jerome Powell at the Jackson Hole symposium on Friday. Additionally, traders will be guided by this week’s major US macroeconomic releases. The combination of factors will play a key role in influencing the short-term USD price dynamics and help determine the next leg of a directional move for the USD/JPY pair.
Meanwhile, Tuesday’s economic calendar in the United States, with PMI data, new home sales and the Richmond manufacturing index, will boost the demand for the dollar. This, coupled with US bond yields and general market risk sentiment, should give the USD/JPY pair some momentum and allow traders to take advantage of short-term opportunities.
Technical levels
USD/CHF
Panorama | |
---|---|
Last Price Today | 0.9682 |
Today’s Daily Change | 0.0041 |
Today’s Daily Change % | 0.43 |
Today’s Daily Opening | 0.9641 |
Trends | |
---|---|
20 Daily SMA | 0.9539 |
50 Daily SMA | 0.9635 |
100 Daily SMA | 0.965 |
200 Daily SMA | 0.9443 |
levels | |
---|---|
Previous Daily High | 0.9659 |
Previous Daily Minimum | 0.9574 |
Previous Maximum Weekly | 0.9598 |
Previous Weekly Minimum | 0.9409 |
Monthly Prior Maximum | 0.9886 |
Previous Monthly Minimum | 0.9502 |
Daily Fibonacci 38.2% | 0.9626 |
Daily Fibonacci 61.8% | 0.9606 |
Daily Pivot Point S1 | 0.959 |
Daily Pivot Point S2 | 0.954 |
Daily Pivot Point S3 | 0.9506 |
Daily Pivot Point R1 | 0.9676 |
Daily Pivot Point R2 | 0.971 |
Daily Pivot Point R3 | 0.9761 |
Source: Fx Street

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