USD/JPY Price Forecast: Consolidates near 160.00 as US NFP takes centre stage
Looking at the 1-hour chart, the pair gained strength for a move toward 160.00. A high was formed at 160.04, and the pair is now consolidating gains near the 23.6% Fib retracement level of the upward move from the 159.54 swing low to the 160.04 high.
USD/JPY tests 160 while AUD/JPY struggles near resistance. NFP could provide the catalyst for greater volatility across yen c.
It has been five weeks since the MOF first intervened, sending USD/JPY more than 500 pips lower. A second shot was fired just four days later, although it only generated a 300-pip decline.
The trading week is almost over, and one of the main factors still standing out is the lack of strength in the Japanese yen. So far, USD/JPY has remained mostly neutral, moving by only around 0.1% over the last two sessions, without showing a clear recovery from the Japanese currency.
Falling oil prices reduced demand for safe-haven assets, which was bearish for the American currency.
The 160 level remains a key resistance zone on the USD/JPY chart, defining the next structural move ahead of the Bank of Japan (BOJ) and Federal Reserve policy meetings this month.
Our previous outlook for USDJPY still stands as the pair slowly marches towards the resistance zone at 160.20-60. Traders are watching the resistance zone of 160.20-60 as the last time the market was here, the BoJ threatened to intervention to support the Yen.
The Japanese yen continued its downward spiral today as the US dollar crash gained steam and as economists predicted that the BoJ will hike interest rates twice this year. The USD/JPY exchange rate jumped to 159.88, its highest point since April 30th.
USD/JPY Price Forecast: Trades below 160.00 intervention threshold; bullish bias intact
The better-than-expected ISM Services PMI report provided additional support to the American currency.
USD/JPY has extended its recovery from the May lows and is now approaching a major resistance zone near the yearly highs. While the broader technical outlook remains constructive, traders are once again nearing levels that have historically attracted the attention of Japanese officials.