USDJPY Prediction: 150.00 Out of Reach, For Now

Summary:
• The USDJPY pair has risen by more than 6 percent in the last month, but the dollar does not have what it takes to sustain successive gains.

USDJPY returned to the upside on Wednesday, trading at 149.65 after gaining 0.3 percent in the New York session. The pair faces rejection at the psychological barrier at 150.00 and has fell short of the momentum to break above that mark in the last two sessions. The dollar’s gains are limited by falling US bond yields, and traders’ reassessment of the Fed’s November interest rate decision.

The US dollar’s momentum is bullish, having gained 6 percent over the Japanese yen in the last month. In addition, the yen is susceptible as the Bank of Japan isn’t expected to raise interest rates for the rest of the year. On the other hand, the US dollar’s relative safe haven strength over the yen has dissipated in the last week as the Israel-Iran war rhetoric thaws.

Meanwhile, most traders are cashing in on the Fed raising interest rates by no more than 25 basis points in November. US election politics is also at play, as the USDJPY pair got some support from the latest polls which showed that former President Donald Trump leads the race to the White House.

Looking ahead, the market will have eyes trained on Japan’s Consumer Price Index (CPI) reading for September, scheduled for release on Thursday. However, that is unlikely to outweigh the impact of US September Core Retail Sales and Initial Jobless Claims date, also set for release tomorrow. In the intervening period, Japan’s Adjusted Trade Balance figures will provide insights into the country’s dollar reserves and could inject some volatility later on Wednesday.

USDJPY today

The USDJPY trading pair will likely head upward if the buyers keep it above 149.53. In that case, the pair could move to 149.73, where it will likely encounter the first resistance. If the bullish control continues, USDJPY will break above that level and could go on to test the second resistance at 149.93.

On the downside, the bears will be in control if the action stays below 149.53. The downward action will likely find the first support at 149.40, but an extended bearishness could break below that mark and render the upside narrative invalid. Meanwhile, the resulting momentum could push the pair could lower to test 149.22.