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USDJPY Looks for Support After a Five-Day Losing Streak

USDJPY
USDJPY

The USDJPY pair is testing support after breaking a five-day losing streak yesterday. The current level provided the lows in mid-March where Yen safe haven buying drove the pair lower.

The dollar found buyers today after new home sales figures came in exactly as expected with a 2.4% gain. Traders will now turn their attention to Jerome Powell’s testimony today, whilst there are other Federal Reserve speeches over the next two days. The market will look for an update to the Fed’s inflation plans and maybe get some comments about potential stimulus measures. New lockdowns are being slated in Europe and this could push the global growth projections further out.

Tomorrow will see a speech from Bank of Japan’s Governor Kuroda and this will be his first since the country saw a new Prime Minister chosen in Yoshihide Suga. The speech may give Kuroda a platform to share any policy additions from the new leader, however, Suga was a close advisor to previous P.M. Shinzo Abe so markets don’t expect to see many changes in the bank’s fiscal strategy. 

The following day will see BOJ policy meeting minutes and this will likely have a similar tone to the Governor’s speech. The Prime Minister would not have been confirmed and that will mean that Abe’s policies will remain a talking point in the minutes. Kuroda told reporters last week that the BOJ will keep easing in order to hit its 2% inflation target and would maintain its close relationship with the government.

USDJPY Technical Outlook

The USDJPY has found support at the 104.20 level to break a losing streak and the pair will look to build from this level. The USD index is at a key level and this should help to drive the direction for the pair in the days ahead. The market would have to get to the 105.50-106.00 level to break the channel line. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching

USDJPY Daily Chart