Following comments from Federal Reserve Chair Jerome Powell on Friday, the probability of a rate cut increased, which could push the Bank of Japan to raise its own rate to reduce the gap in monetary policy. BoJ Governor Kazuo Ueda said that labor market conditions would support wage growth and that stable inflation is likely to persist. Friday’s data showed that core consumer prices rose 3.1% in July, above forecasts and still well above the 2.0% target. However, local economic data did not support the yen: leading indicators rose 0.8% in June against the 1.3% forecast, and the coincident index added 0.7% versus the expected 0.8%. As a result, the leading index stood at 105.6 compared to 104.8, while markets had expected 106.1.
The U.S. dollar began a local rise, holding near 98.20 in the USDX. Markets are closely watching developments around the Federal Reserve, which faces pressure from the White House to cut borrowing costs and strengthen political control. Recently, President Donald Trump dismissed Fed Board member Lisa Cook, citing her involvement in a mortgage case initiated earlier in the summer, where major U.S. banks are implicated. These vacancies are likely to be filled with candidates loyal to the president, increasing political influence over the Fed, which has historically been independent.
Support and Resistance Levels
On the daily chart, the price is moving within an upward trend and attempting to reach the resistance line of the ascending channel with a range of 152.00–144.00.
Technical indicators continue to show a buy signal, though momentum has slowed: fast EMAs on the Alligator indicator are moving away from the signal line, and the AO histogram, while above the baseline, is forming corrective bars.
Support levels: 146.80, 143.30.
Resistance levels: 148.70, 151.00.
Trading Scenarios
If resistance is broken and growth continues, positions to buy become relevant above 148.70 with a target of 151.00 and a stop-loss at 148.00. Implementation period: 7 days or more.
If the decline continues and the price consolidates below 146.80, sell positions become relevant with a target of 143.30 and a stop-loss at 148.00.
Scenario
Timeframe: Weekly
Recommendation: BUY STOP
Entry point: 148.70
Take Profit: 151.00
Stop Loss: 148.00
Key levels: 143.30, 146.80, 148.70, 151.00
Alternative Scenario
Recommendation: SELL STOP
Entry point: 146.80
Take Profit: 143.30
Stop Loss: 148.00
Key levels: 143.30, 146.80, 148.70, 151.00