USD/JPY Fluctuates Around 151.50: Waiting for US CPI Data and BoJ Decision

Forex

Economic

Summary:

The USD/JPY pair is trading around 151.68 with a slight bullish bias. Market sentiment is dominated by expectations of the Bank of Japan (BoJ) monetary policy and important economic data from the US. Technical signals suggest that USD/JPY has the potential to continue rising in the short term....

BUY USDJPY

Close Time

CLOSED

151.850

Entry Price

152.500

151.400

157.874 +0.785 +0.50%

28.1

Pips

Loss

151.400

151.569

Exit Price

151.850

Entry Price

152.500

USD/JPY is currently hovering near key resistance at 151.50, after a slight rebound from support at 150.80 earlier in the week. Japan reported a 0.3% increase in Q3 GDP, beating market expectations, along with the highest services PMI this year, which bolsters the case for a 25 basis point rate hike by the BoJ at its December 19 meeting.

However, uncertainty remains as BoJ Governor Kazuo Ueda stressed that the policy decision will depend on upcoming economic data, including the producer price index (PPI) and other inflation pressures. Meanwhile, in the US, November CPI data will be released tomorrow, with forecasts for a decline to 2.3% year-on-year (vs. 2.6% last month). If CPI comes in lower than expected, the Fed could maintain a more dovish policy, putting downward pressure on the USD.

Market psychology

Current investor sentiment reflects heightened caution in the face of key economic factors from both the US and Japan. The Japanese yen is supported by expectations that the BoJ will raise interest rates to control inflation and stabilize the foreign exchange market. However, uncertainty over the BoJ's ability to act decisively has kept the yen from making a strong breakthrough.

On the other hand, the USD remains firm thanks to stable US economic data and expectations that the Fed will not cut interest rates in the near term. The RSI indicator on the H4 chart shows that USD/JPY is in the neutral zone, reflecting a balanced market sentiment but vulnerable to major economic news.

Technical analysis

On the M15 chart and Bollinger Bands analysis, USD/JPY is fluctuating near the middle band of the Bollinger Bands at the price of 151.40–151.50. The upper and lower bands are narrowing, indicating that the market is in an accumulation phase before confirming a new trend.

The Stochastic Oscillator (5,3,3) is in the neutral zone (38–58), indicating a slight correction before the price confirms the next trend. The important support level is now at 150.80 and further at 149.30; meanwhile, strong resistance is at 151.80 and the extension zone near 152.50.

If the price breaks the resistance level of 151.80 with high volume, the uptrend could continue with a short-term target at the 152–152.50 zone. Conversely, if the price falls below the support level of 150.80, the possibility of a deeper correction to the 149–149.30 zone is high.

Trading Recommendations

Overall, USD/JPY is currently in a sensitive phase with pressure from both the US and Japanese markets ahead of important upcoming economic news such as the US CPI and the policy decision from the BoJ on December 19.

Based on current fundamental and technical analysis:

If price breaks resistance at 151.80.

Entry: 151.85

Take Profit: 152.50

Stop Loss: 151.40

Risk Warnings and Disclaimers

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Eva Chen

Forex

Central Bank

Summary:

The information regarding the Bank of Japan's (BOJ) monetary policy for 2025 remains unclear; however, due to the Federal Reserve's fiscal adjustments setting a significant pace for transformation, it is anticipated that pressure will increase.

BUY USDJPY

Close Time

CLOSED

151.608

Entry Price

158.450

149.000

157.874 +0.785 +0.50%

211.8

Pips

Profit

149.000

153.726

Exit Price

151.608

Entry Price

158.450

Fundamentals

The USDJPY reached a peak of 151.50 on Tuesday, marking the highest level in a week. This movement is primarily attributed to the ongoing uncertainty regarding the timing of the BOJ's next interest rate hike. There remains a divergence in the market regarding whether the BOJ will implement a rate increase in December or postpone it until January.

Recent statements from BOJ Governor Kazuo Ueda have underscored that, given the stable economic indicators aligning with expectations, a rate hike is imminent. Conversely, BOJ policymaker Toyoaki Nakamura has expressed concerns about the sustainability of wage growth in Japan and signs of economic weakness, which adds to the uncertainty affecting market dynamics.

Recent GDP data from Japan indicates a quarter-on-quarter growth of 0.3% in the third quarter, surpassing the anticipated 0.2%. This stronger-than-expected economic performance supports a more aggressive stance on monetary policy adjustments by the BOJ in the future.

Fitch analysts have indicated that Japan's economic growth in 2025 is expected to be significantly stronger, surpassing its potential. The increase in consumer spending suggests that household conditions are favorable; with wage growth outpacing inflation, real incomes are on the rise, and the labor market remains tight. Preliminary signs indicate that the upcoming wage negotiations in Tokyo are likely to be positive, while fiscal stimulus may be supported through energy subsidies and assistance for low-income households.

Fitch has revised its CPI forecast for Japan at the end of 2024 and anticipates a potential inflation rate of around 2% in the first quarter of 2025. In this context, it is expected that the BOJ will continue to gradually tighten its monetary policy. The weakness of the yen supports the rationale for a rate hike before the end of 2024, with Fitch predicting that the BOJ will raise rates twice in 2025, bringing the target rate to 1%. The risks lean towards further tightening.

However, we believe that the BOJ may opt to raise the policy rate by 25 basis points in January rather than December. Given the levels of the USDJPY following the release of U.S. non-farm payrolls, the BOJ has no compelling reason to rush into a rate hike. In this context, BOJ Governor Kazuo Ueda may be more inclined to assess the upcoming spring wage negotiations and the progress of U.S. tariffs. Following the anticipated 25 basis point hike in January, our forecast for the BOJ to raise rates by 25 basis points has been pushed back from April to June, and from October to December.

Momentum Indicators Support Bullish Outlook_1

Technical Analysis

The USDJPY has been on an uptrend after finding support at 149.35. The bulls have successfully breached the 151.00 level, indicating a potential further rise towards 152.50.

Currently, a narrow consolidation range has been formed around 151.00. If the bears break below this range, a subsequent pullback to 149.90 may occur, followed by a further decline to the 61.8% retracement level between 139.57 and 156.74, eventually dropping to 146.12.

Conversely, if the price breaks above this range, the uptrend may continue towards 152.50, with the possibility of extending to 153.30. Additional gains could lead to a retest of the 156.74 high.

Overall, the MACD indicator supports this bullish outlook, with its signal line positioned below zero but showing a sharp upward movement.

Trading Recommendations

Trading Direction: Buy

Entry Price: 151.06

Target Price: 158.45

Stop Loss: 149.00

Valid until: December 25, 2024 23:55:00

Support: 151.00, 150.34, 149.35

Resistance: 152.50, 153.30, 156.74

Risk Warnings and Disclaimers

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Eva Chen

Forex

Central Bank

Summary:

Due to the varying market expectations regarding the Bank of Japan's (BOJ) interest rate hike in December, the GBPJPY has rebounded from its upward trend line. The market widely anticipates that the Bank of England (BOE) will maintain the current interest rate at 4.75% on December 19, which is bullish for the pound.

BUY GBPJPY

Close Time

CLOSED

193.561

Entry Price

199.100

189.500

197.639 +0.829 +0.42%

134.8

Pips

Profit

189.500

194.909

Exit Price

193.561

Entry Price

199.100

Fundamentals

The GBPJPY has risen for the second consecutive trading day, with trading prices around 193.40 during the European session on Tuesday. This recent appreciation of the GBPJPY may be attributed to a renewed weakness in the yen, which stems from mixed market expectations regarding a potential interest rate hike by the BOJ in December.

BOJ Governor Kazuo Ueda recently indicated that the timing for the next interest rate increase is approaching, given the robust core inflation data in Japan. This has sparked speculation about a possible rate hike during the policy meeting scheduled for December 18-19.

However, conflicting media reports suggest that the BOJ may give up a rate increase this month. Adding to the uncertainty, dovish BOJ member Toyoaki Nakamura cautioned against premature rate hikes, further exerting downward pressure on the yen.

On the UK side, as investors grow increasingly confident that the BOE will maintain the current interest rate of 4.75% during the monetary policy meeting on December 19, the GBP has strengthened against major currencies.

It is expected that the majority of BOE officials will vote to keep interest rates unchanged, as the overall inflation rate in the UK has risen again after briefly dipping below the central bank's 2% target. Previously, the BOE had forecasted a rebound in inflation after temporarily aligning with the expected range. This has contributed to the GBPJPY's renewed strength.

Technical Analysis

The GBPJPY has been on an upward trajectory, rebounding from a support level around 188.00 over the past few days and currently trading above 193.00. This upward trend suggests a potential reversal in market sentiment.

So far, the stochastic oscillator is demonstrating strong momentum as it tests the overbought zone, while the relative strength index continues to maintain a positive outlook above 50.

If the price continues to rise, it may encounter immediate resistance at the 193.55 level, which coincides with the 20-day SMA. A further break above the 55-day SMA, currently at 193.97, could signal the beginning of a reversal. Before reaching the critical level of 199.70, the 200-day and 50-day SMAs near 195.00 may present significant obstacles.

Technical indicators suggest that the GBPJPY could continue to trend upward in the short term, particularly following a break above the 55-day SMA. However, investors should exercise caution and remain vigilant for any signs of reversal.

Trading Recommendations

Trading Direction: Buy

Entry Price: 192.70

Target Price: 199.10

Stop Loss: 189.50

Valid until: December 25, 2024 23:55:00

Support: 192.41, 191.29, 190.40

Resistance: 193.55, 193.97, 195.00

Risk Warnings and Disclaimers

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Alan

Central Bank

Forex

Summary:

The Reserve Bank of Australia's (RBA) latest interest rate decision keeps rates unchanged at 4.35%, but heightened expectations for a rate cut in February pressure the Australian dollar (AUD).

SELL AUDUSD

Close Time

CLOSED

0.63925

Entry Price

0.62300

0.64750

0.62249 -0.00006 -0.01%

162.5

Pips

Profit

0.62300

0.62298

Exit Price

0.63925

Entry Price

0.64750

Fundamentals

Earlier today, the RBA announced its latest interest rate decision, maintaining the benchmark rate at 4.35%, aligning with market forecasts—its ninth consecutive hold.

Despite unchanged rates, the RBA's dovish stance on inflation prospects, noting gradual return to targets albeit requiring time, fueled rate cut bets in markets. Swap traders increased wagers on a February rate decrease, exerting depreciation pressure on the AUD.Furthermore, the RBA highlighted weak economic output growth, constrained by declining real disposable income and tightening financial conditions affecting household spending. Economic growth concerns may continue suppressing AUD performance.

Additionally, strong US economic indicators alongside imminent "Trump trades" might strengthen the USD, amplifying downward pressure on AUD/USD.

Technical Analysis

Depreciation May Continue under Bearish Engulfing Pattern_1

In the daily chart, AUD/USD exhibits a clear downtrend, rebounding yesterday from 0.6390 support to 0.6450 before weakening again today. Nearly erasing yesterday's gains indicates a persistently bearish sentiment and strong selling pressure, suggesting a continuation of previous declines.

If the daily chart closes with a large bear candle and engulfs the previous bull candle, a Bearish Engulfing Pattern should emerge to drag AUD/USD lower. The first target support level will be 0.6200.

Therefore, try to sell at highs.

Trading Recommendations

Trading direction: Sell

Entry price: 0.6390

Target price: 0.6230

Stop loss: 0.6475

Valid Until: Dec 24th, 2024 15:00:00

Support: 0.6348/0.6269/0.6200

Resistance: 0.6470/0.6527/0.6549

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

USD/CHF slipped to 0.8770 as geopolitical turmoil in the Middle East bolstered the safe-haven Swiss Franc, while traders anticipated a dovish SNB rate cut and a Fed rate reduction amid softening U.S.

SELL USDCHF

Close Time

CLOSED

0.87900

Entry Price

0.86300

0.88700

0.90077 +0.00173 +0.19%

80.0

Pips

Loss

0.86300

0.88726

Exit Price

0.87900

Entry Price

0.88700

The USD/CHF currency pair edged lower during Tuesday's early European session, retreating to the 0.8770 mark and reflecting a 0.19% decline on the day. The movement underscores the Swiss Franc’s appeal as a safe-haven currency amid escalating geopolitical instability, alongside speculation about the Swiss National Bank’s (SNB) dovish policy stance ahead of its highly anticipated rate decision later this week. Meanwhile, U.S. economic data and inflation figures are also in focus, with the Federal Reserve's upcoming meeting looming large over market sentiment.

The Swiss Franc has found renewed strength as turmoil in the Middle East intensifies. Over the weekend, the regime of Syrian President Bashar al-Assad collapsed, with Assad and his family fleeing to Moscow where they were granted political asylum. This sudden and dramatic end to Assad’s fifty-year rule in Syria has raised concerns about the possibility of regional conflict. The uncertainty surrounding Syria's future has amplified demand for safe-haven assets, including the CHF, which continues to gain against the U.S. Dollar.

Analysts at ANZ Group Holdings highlighted the geopolitical ramifications of this development, stating, “The government’s collapse in Syria could see haven demand flowing in.” Indeed, the Swiss Franc’s response reflects this trend, as investors hedge against heightened geopolitical risks. The CHF’s status as a refuge currency positions it to benefit further should tensions escalate or contagion spread across the region.

In parallel, market attention is firmly fixed on the Swiss National Bank’s monetary policy meeting scheduled for Thursday. Consensus among economists suggests that the SNB is poised to reduce its policy rate by 25 basis points, lowering it to 0.75%. A recent Reuters poll revealed that more than 85% of respondents anticipate this move, which aligns with the SNB's ongoing efforts to support economic growth and counter subdued inflation pressures.

Christian Schulz, deputy chief European economist at Citi, expects the SNB to maintain a cautious outlook, noting, “The SNB’s guidance will likely remain dovish.” While a rate cut could soften the CHF temporarily, any immediate weakness may be offset by heightened safe-haven demand driven by external risks. This delicate interplay between domestic monetary policy and global geopolitical factors is likely to keep the USD/CHF pair under pressure.

Across the Atlantic, the Federal Reserve’s December policy meeting is shaping up to be another pivotal moment for financial markets. Friday’s U.S. jobs report painted a mixed picture of the labor market. While non-farm payrolls growth remained robust, the unemployment rate ticked up to 4.2%, signaling a cooling trend. This has fueled expectations that the Fed will opt for a rate cut in its upcoming meeting, a move that could further weaken the U.S. Dollar.

Market participants are now awaiting the release of the U.S. Consumer Price Index (CPI) data for November, set to be published on Wednesday. A softer inflation reading would reinforce the case for a Fed rate cut, exerting additional downward pressure on the USD/CHF pair. Conversely, a stronger-than-expected CPI print could temper market expectations, creating short-term volatility but potentially halting the pair’s slide.

Technical Analysis

From a technical standpoint, USD/CHF exhibits a distinctly bearish structure, underscored by the formation of a Head & Shoulders pattern on the daily chart. This classic reversal pattern indicates the potential for further declines, with the next significant support level located near 0.8673. A breach of this level could open the door to additional losses, targeting the 0.8630 zone.

However, the bearish outlook hinges on the pair remaining below the 0.8805 resistance level. A decisive break above this threshold would invalidate the Head & Shoulders pattern and shift the focus toward recovery, with potential gains extending to the 0.8883 area. Still, with geopolitical risks and dovish central bank expectations dominating the narrative, the downside appears more compelling in the near term.

TRADE RECOMMENDATION

SELL USDCHF

ENTRY PRICE: 0.8790

STOP LOSS: 0.8870

TAKE PROFIT: 0.8630

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Summary:

Gold prices edge closer to a two-week high as safe-haven demand rises amid geopolitical tensions and expectations for a December Federal Reserve rate cut.

BUY XAUUSD

Close Time

CLOSED

2665.00

Entry Price

2720.00

2620.00

2626.56 +9.85 +0.38%

304.7

Pips

Profit

2620.00

2695.47

Exit Price

2665.00

Entry Price

2720.00

Gold prices (XAU/USD) are surging, buoyed by a confluence of geopolitical tensions, central bank activity, and Federal Reserve speculation. On Tuesday, the precious metal continued its upward trajectory, trading just below the two-week high it touched on Monday. A backdrop of escalating geopolitical risks and shifting monetary policy expectations has set the stage for a potential rally, with the technical landscape favoring bulls.

The worsening Russia-Ukraine conflict has reignited fears of prolonged instability in Eastern Europe, driving investors towards safe-haven assets like gold. Over the weekend, the political climate in South Korea and France also deteriorated, adding to the broader uncertainty. Meanwhile, turmoil in the Middle East has further bolstered gold’s appeal. Syrian rebels gained ground, forcing President Bashar al-Assad to flee to Russia, a move that sent shockwaves through global markets and funneled capital into the yellow metal.

These geopolitical flashpoints are compounded by concerns about U.S. President-elect Donald Trump’s aggressive trade policies. His threats of imposing hefty tariffs on key trading partners, including Mexico, Canada, and China, and a 100% tariff on BRICS nations, have stoked fears of a global trade war. These anxieties lend further support to gold as investors seek refuge from the potential economic fallout.

Adding to gold’s momentum is the recent action by the People’s Bank of China (PBOC), which announced its first gold purchase in seven months. The acquisition of 160,000 fine troy ounces in November signals renewed interest from one of the world’s largest gold consumers and provides an additional tailwind for prices. This development highlights the strategic importance of gold in central bank reserves, particularly during periods of heightened economic and political uncertainty.

The Federal Reserve’s upcoming December policy meeting looms large, with market participants largely expecting a 25-basis-point rate cut. The CME Group’s FedWatch Tool shows an 85% probability of this scenario, reflecting the market’s conviction that the Fed will continue to prioritize economic support. This expectation has kept U.S. Treasury bond yields suppressed and the U.S. dollar on the defensive, both of which underpin the non-yielding gold price.

However, there are countercurrents to consider. Recent hawkish comments from several Federal Reserve officials suggest that the central bank could pause its rate-cutting cycle if inflationary pressures reemerge. Expectations that Trump’s fiscal policies might reignite inflation add complexity to the Fed’s decision-making process, leaving some uncertainty in the market.

This week’s spotlight will be on the U.S. Consumer Price Index (CPI) for November, scheduled for release on Wednesday. The inflation data will be instrumental in shaping the Fed’s policy stance and could influence gold’s near-term direction. A higher-than-expected CPI reading might strengthen the dollar and weigh on gold, while a softer print could pave the way for further gains in the yellow metal.

Technical Analysis

Gold prices are showing clear signs of bullish intent after settling above the main bullish trend line. This move invalidates the previously anticipated negative scenario and signals a resumption of the broader uptrend. The next immediate target is the $2,720 resistance level, with a breach opening the door for additional gains.

That said, stochastic indicators hint at potential sideways fluctuations in the near term, driven by overbought conditions. A break below $2,647 could disrupt the bullish momentum and prompt a short-term bearish correction. However, as long as gold remains above its key support levels, the broader trend remains decisively upward.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: 2665

STOP LOSS : 2620

TAKE PROFIT: 2720

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Summary:

The Australian Dollar (AUD) continues to slide as the Reserve Bank of Australia (RBA) maintains its Official Cash Rate at 4.35% during its final policy meeting of the year.

SELL AUDUSD

Close Time

CLOSED

0.64000

Entry Price

0.63000

0.65000

0.62249 -0.00006 -0.01%

54.0

Pips

Profit

0.63000

0.63460

Exit Price

0.64000

Entry Price

0.65000

The Australian Dollar (AUD) is under pressure, extending its losses as the Reserve Bank of Australia (RBA) opted to hold its Official Cash Rate (OCR) steady at 4.35% during its December policy meeting. This decision comes amidst signs that inflation risks have moderated, even as they remain elevated above the RBA's target range of 2-3%. RBA Governor Michele Bullock defended the Bank’s cautious stance, emphasizing that inflationary pressures are no longer accelerating but warrant close monitoring to prevent resurgence.

The RBA’s decision reflects broader concerns over Australia’s economic trajectory. Recent data paints a mixed picture. On the employment front, the unemployment rate held steady at 4.1% in October for the third consecutive month. The labor market added 15,900 jobs in net terms, including 9,700 full-time positions. However, growth in job creation remains insufficient to alleviate concerns over weaker economic momentum.

Australia's annualized GDP growth slowed to 1.3% in the third quarter, its weakest pace since the pandemic’s peak. Quarterly GDP rose by a modest 0.3%, falling short of market expectations for 0.4%. This sluggish growth, coupled with a cooling Trimmed Mean Consumer Price Index (CPI) — which decelerated to 3.5% year-over-year in Q3 — has led markets to price in a 96% probability of an RBA rate cut in April 2024, according to Refinitiv data.

Weaker economic performance, compounded by subdued consumer confidence and softer business investment, highlights Australia’s vulnerabilities. Despite these challenges, Governor Bullock maintains that keeping rates high is essential to anchor inflation expectations.

The Australian Dollar’s fate is inextricably tied to China, Australia’s largest trading partner. China’s recent economic data sends mixed signals. The nation’s trade balance improved to CNY 692.8 billion in November, driven by modest gains in exports (1.5% YoY) and imports (1.2% YoY). However, this recovery pales in comparison to the double-digit export growth seen earlier this year.

Meanwhile, China’s Consumer Price Index (CPI) posted a sharp 0.6% decline in November, highlighting persistent deflationary pressures. These weak inflation numbers have sparked hopes for further fiscal and monetary stimulus in 2024. Chinese President Xi Jinping’s recent reassurances about meeting annual growth targets and enacting “proactive fiscal” measures could lend support to the AUD. However, these developments are unlikely to offset the immediate bearish pressure.

Adding to the AUD’s woes is the continued strength of the US Dollar (USD). The Greenback has extended its rally for the third straight session, fueled by cautious market sentiment ahead of key US Consumer Price Index (CPI) data. November’s Non-Farm Payroll (NFP) report, which showed a robust 227,000 job gain and stable wage growth, has bolstered expectations that the Federal Reserve may hold rates steady in December. However, market sentiment remains cautious, with traders pricing in an 85.8% probability of a 25-basis-point rate reduction at the Fed’s meeting, per the CME FedWatch Tool.

The divergence in economic trajectories between the US and Australia underscores the AUD’s vulnerability. While the US economy demonstrates resilience, Australia grapples with decelerating growth, adding further downside risk to the currency.

Technical Analysis

The AUD/USD pair continues to trade within a well-defined bearish channel. Recent price action saw the pair test resistance near $0.6440 before retreating sharply, underscoring the strength of the downtrend. Technical indicators align with the bearish narrative, with momentum oscillators signaling further downside potential.

Key support levels to watch are $0.6355 and $0.6300, with a break below these levels likely to accelerate the decline. Conversely, any sustained move above $0.6460 could trigger a short-term bullish correction, though such a scenario appears unlikely given prevailing macroeconomic headwinds.

TRADE RECOMMENDATION

SELL AUDUSD

ENTRY PRICE: 0.6400

STOP LOSS: 0.6500

TAKE PROFIT: 0.6300

Risk Warnings and Disclaimers

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USD/JPY Fluctuates Around 151.50: Waiting for US CPI Data and BoJ Decision

Market psychology

Technical analysis

Trading Recommendations

Momentum Indicators Support Bullish Outlook

Fundamentals

Technical Analysis

Trading Recommendations

Bullish Momentum Has Been Reignited

Fundamentals

Technical Analysis

Trading Recommendations

Depreciation May Continue under Bearish Engulfing Pattern

Fundamentals

Technical Analysis

Trading Recommendations

USD/CHF Slips to 0.8770 Amid SNB Rate Cut Expectations and Middle East Turmoil

Gold Prices Climb Amid Geopolitical Risks and Federal Reserve Speculations

Australian Dollar Slumps as RBA Stands Pat, Eyes Inflation Risks; USD Strengthens Ahead of CPI Data

Technical Analysis

Risk Disclosure