The USDJPY currency pair, currently trading at 148.850, is expected to continue its upward trend towards 150.00 due to the Bank of Japan’s continued preference for a cautious low-interest rate strategy.

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• USD/JPY aims to extend the rally to 150.00 as the BoJ continues to favor a dovish interest rate policy.

The pair currently trades last at 148.850.

The previous day high was 148.96 while the previous day low was 148.25. The daily 38.2% Fib levels comes at 148.69, expected to provide support. Similarly, the daily 61.8% fib level is at 148.52, expected to provide support.

The USD/JPY pair faces a less-confident resistance near 149.20 but is expected to resume its upside move toward the crucial resistance of 150.00. The asset has been capitalizing on dovish interest rate guidance from Bank of Japan (BoJ) Governor Kazuo Ueda and strong US Dollar amid a cautious market mood.

S&P500 futures posted significant losses in the London session as investors worried about the consequences of higher interest rates by the Federal Reserve (Fed), which is expected to remain elevated for a longer period.

The US Dollar Index (DXY) refreshes a 10-month high around 106.20 as Fed policymakers favored further tightening of monetary policy to ensure price stability. Unlike global slowdown fears, the US economy is resilient due to falling inflation and upbeat labor market conditions. While US inflation has been softening, robust consumer spending could trigger upside risks to inflation. This could encourage Fed policymakers to support one more interest rate hike.

Meanwhile, investors await the US Durable Goods Orders data for August. Orders are seen contracting at a slower pace of 0.4% against the 5.2% decline seen in July. The US manufacturing sector is already going through a vulnerable phase. The US Manufacturing PMI has been contracting for a long period and a weak new order book indicates that factory activity will remain in contraction.

On the Japanese Yen front, BoJ Ueda supports for extending the expansionary monetary policy as 2% inflation is not in sight. Kazuo Ueda cited that a moderate rise in inflation backed by wage growth would be a real victory for the central bank.

Japan Finance Min Suzuki said Japan is at a critical stage whether to spur consumption, wage growth; Reiterated excessive FX moves are not desirable, watching FX moves with a high sense of urgency.

Technical Levels: Supports and Resistances

USDJPY currently trading at 148.84 at the time of writing. Pair opened at 148.88 and is trading with a change of -0.03 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 147.3, 50 SMA 144.93, 100 SMA @ 142.58 and 200 SMA @ 137.7.

The previous day high was 148.96 while the previous day low was 148.25. The daily 38.2% Fib levels comes at 148.69, expected to provide support. Similarly, the daily 61.8% fib level is at 148.52, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 148.43, 147.98, 147.72
• Pivot resistance is noted at 149.14, 149.41, 149.86

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