- USD/JPY falls to about 148.35 after a three-day winning streak.
- US tariff agreements bolster the US dollar.
- Market participants are keenly awaiting monetary policy updates from the Fed and BOJ this week.
The USD/JPY pair dipped to around 148.35 during the late Asian trading session on Tuesday, having difficulty maintaining its three-day run of gains. The US dollar is demonstrating strength, and the pairing appears favorable following a trade agreement between the US and the European Union.
Over the weekend, officials from both regions solidified the tariff agreement, which alleviated concerns regarding global trade and potential issues affecting US supply chains.
As of now, the US Dollar Index (DXY), tracking the dollar against six other major currencies, is holding steady near weekly highs at around 98.67.
In the meantime, investors are looking ahead to monetary policy decisions from both the Federal Reserve and the Bank of Japan (BOJ), expected on Wednesday and Thursday respectively. Predictions suggest both central banks will keep interest rates unchanged.
On Tuesday, eyes will be on the June Jolts Job Openings data, set to be released at 14:00 GMT. Analysts anticipate that US companies will report approximately 7.55 million job openings.
The USD/JPY is nearing the horizontal resistance level of the ascending triangle chart pattern, sitting around 148.60. The upper boundary of this pattern is drawn from the April lows of approximately 139.90. The 20-day exponential moving average (EMA) is trending around 147.04, suggesting a bullish outlook in the short term.
The relative strength index (RSI) is approaching a mark of 60.00; surpassing this level may indicate new bullish momentum.
The pair is hovering near the psychological milestone of 150.00, with a previous peak observed at 151.20 back on March 28.
On the flip side, if the pair slips below the July 24 low of 145.85, it could target the July 7 low of 144.22, followed by the July 3 low of 143.45.
USD/JPY Daily Chart
Economic indicators
FOM Interest Rate Decision
The Federal Reserve System meets regularly to discuss monetary policy and adjust interest rates as necessary, aiming for a 2% inflation rate while ensuring full employment. Raising rates can strengthen the US dollar by attracting foreign investment, while rate cuts might weaken it as capital flows to markets with higher returns. If rates hold steady, investors will scrutinize the tone of the Federal Open Market Committee’s statements for signs of future direction—hawkish or dovish.
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Next release:
Wednesday, July 30th, 2025, 18:00
Frequency:
Irregular
Consensus:
4.5%
Previous:
4.5%
Source:
Federal Reserve System
