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EUR/JPY Price Forecast: Strengthens above 171.50, further consolidation cannot be ruled out

EUR/JPY strengthens to around 171.85 in Wednesday’s early European session. Positive outlook of the cross prevails above the 100-day EMA, but further consolidation looks favorable with the neutral RSI indicator. The immediate resistance level is seen at 172.67; the initial support level is located at 171.12. The EUR/JPY cross gains traction to near 171.85 during the early European session on Wednesday. The Japanese Yen (JPY) softens against the Euro (EUR) amid the improved risk sentiment, which undermines the safe-haven currency. Investors await a series of economic reports that could shape expectations for Bank of Japan (BoJ) policy. Japan’s Tokyo Consumer Price Index (CPI) for August is due later on Friday. Technically, EUR/JPY keeps the bullish vibe on the daily chart, with the price holding above the key 100-day Exponential Moving Average (EMA). However, further consolidation or temporary sell-off cannot be ruled out as the 14-day Relative Strength Index (RSI) hovers around the midline. This suggests the neutral momentum in the near term. The first upside target to watch for the cross is seen at 172.67, the high of August 25. Extended gains could see a rally to 173.00, representing the upper boundary of the Bollinger Band and round mark. Further north, the next hurdle is located at 173.90, the high of July 28. On the other hand, the initial support level for the cross emerges at 171.12, the low of August 20. A breach of this level could expose 170.65, the lower limit of the Bollinger Band. The additional downside filter to watch is the 170.00 psychological level. EUR/JPY Daily Chart Japanese Yen FAQs The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors. One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen. Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential. The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in. Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page. 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EUR/JPY Price Forecast: Strengthens above 171.50, further consolidation cannot be ruled out Read More »

USD/JPY Price Forecast: Strives to break above 200-day EMA

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USD/JPY advances as the Japanese Yen underperforms across the board. Economists expect Tokyo CPI ex. Fresh Food to have risen at a moderate pace of 2.5% on year in August. The US Dollar trades calmly as Fed’s Cook decides to file a lawsuit to keep her job. The USD/JPY pair trades 0.4% higher to near 148.00 during the late Asian trading session on Wednesday. The pair advances as the Japanese Yen (JPY) underperforms its peers amid uncertainty surrounding the Tokyo Consumer Price Index (CPI) data for August, which is scheduled to be released on Friday. Japanese Yen Price Today The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the US Dollar. USD EUR GBP JPY CAD AUD NZD CHF USD 0.22% 0.21% 0.37% 0.04% 0.11% 0.25% 0.12% EUR -0.22% -0.01% 0.09% -0.23% -0.18% -0.01% -0.14% GBP -0.21% 0.00% 0.14% -0.17% -0.06% 0.04% -0.09% JPY -0.37% -0.09% -0.14% -0.28% -0.27% -0.12% -0.18% CAD -0.04% 0.23% 0.17% 0.28% 0.07% 0.23% 0.09% AUD -0.11% 0.18% 0.06% 0.27% -0.07% 0.17% 0.03% NZD -0.25% 0.00% -0.04% 0.12% -0.23% -0.17% -0.13% CHF -0.12% 0.14% 0.09% 0.18% -0.09% -0.03% 0.13% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote). Investors will closely monitor the Tokyo CPI data as it will influence market expectations for the Bank of Japan’s (BoJ) monetary policy outlook. Tokyo CPI ex. Fresh Food is expected to have grown at an annual pace of 2.5%, slower than the prior reading of 2.9%. Signs of cooling price pressures would force traders to trim bets supporting interest rate hikes by the BoJ in the remainder of the year. Meanwhile, the US Dollar (USD) trades calmly as Federal Reserve (Fed) Governor Lisa Cook has confirmed to file a lawsuit against her termination by United States (US) President Donald Trump over mortgage allegations. Financial market participants have seen the event as a serious attack on the Fed’s independence and Trump’s intention to politicize the central bank to fulfil his economic agenda. “The concern is the intent of the Trump administration: it’s not to preserve Fed integrity, it’s to install Trump’s own people at the Fed,” analysts at Capital.com said, Reuters reported. USD/JPY trades in an Ascending Triangle formation, which indicates a sharp volatility contraction. The upward-sloping border of the above-mentioned chart pattern is plotted from the April 22 low of 139.40, while the horizontal resistance is plotted from the March 28 high of 151.20. The asset strives to break above the 200-day Exponential Moving Average (EMA), which trades around 147.90. The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, indicating a sideways trend. The pair would see more upside to near the psychological level of 150.00 and the March 28 high of 151.20 if it breaks above the August 22 high of 148.78. On the flip side, a reversal move by the pair below the July 24 low of 145.85 would pave the way for the July 7 low at 144.22, followed by the July 3 low of 143.45. USD/JPY daily chart US Dollar FAQs The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away. The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback. In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar. Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar. Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any

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