USD/JPY Technical Analysis: New Bearish Correction

Following recent attempts by the USD/JPY pair to reach the 1 2.25 resistance level, the USD sell-off against other major currencies continued in a big way ahead of the US holiday. The share of the pair USD / JPY from this retreated to the support level of 139.20 at the time of writing. The drop came as the Federal Reserve is expected to show how united policymakers were at their meeting this month on higher than previously reported interest rates as they calibrate their fight against decades of high inflation. Advertisement Think you’ve got what it takes? Start trading now! Federal Open Market Committee of the Federal Reserve Bank of America No. 1-2. At the end of the November meeting, Federal Reserve Chairman Jerome Powell told reporters that interest rates are likely to rise higher than the FOMC’s forecast for the September quarter indicated. In a follow-up meeting, Powell attributed the move to a higher rate in the Federal Reserve’s benchmark interest rate to a disappointing inflation report that came out after the September projections were released. A crucial question for investors is how the FOMC views the relationship between near-term inflation data and the final amount of interest rates. The authorities will update the forecasts in the next meeting, which will be held on the 13th-1 th. December The US Federal Reserve has waged an aggressive monetary tightening campaign this year, which has included a three-quarter percent hike – three times the normal interest rate – at each of the last four policy meetings. With the benchmark rate now just below %, Powell suggested at his press conference after the November meeting that the Fed is likely to step aside and cut US interest rates in December. More importantly for financial markets and the economy, central bank officials see progress on the inflation front as good enough to stop raising interest rates altogether. The Labor Department’s November 10 report on US consumer prices indicated that the long-awaited spillover of inflationary pressures may finally be beginning. But the good news from the latest data may not be enough to offset the bad news from last month, which was the backdrop for Powell’s tax comments. According to Mark Giannone, chief economist at Barclays plc in New York, the continued strength of the labor market is also a possible reason for the Fed to raise interest rate forecasts. He pointed to monthly job opportunities data released before the November meeting, which showed a decrease in job demand, in contrast to data released after the meeting, which showed job opportunities increasing again. Investors now expect the central bank to decide to raise interest rates by half a point at its December meeting, when the target range of the reference range will rise to .25- .5 percent and rates will be at the highest level in 5 rounds next year. percent, based on futures market contract prices. . That compares with the high end of the central bank’s September forecast of .5% to .75%. Two policymakers — Federal Reserve Chair Loretta Mester in Cleveland and her counterpart in San Francisco, Mary Daley reinforced those expectations in public comments Monday. „I don’t think the market’s expectations have really stopped,” Mester said in an interview with CNBC. And Daly told reporters after the event in Irvine, California, that „I think 5 percent is a good starting point” to gauge how much higher interest rates are needed to restore price stability. USD/JPY forecast today: After recent selling operations and USD/JPY giving up psychological resistance at 1 0.00, bears may find an opportunity to move lower. The nearest support levels of the last activity could be 138.90 and 137.80. The last level is perfect if you are thinking of buying the dollar-yen again. The policy divergence between both the US and Japanese central banks supports a quick return to the upward trend, as happened in the last sessions. On the other hand, the proximity of the 1 2.25 resistance level measured this week is important for the bulls to control the trend.

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