#USDJPY @ 146.556 Powell’s hawkish tone on inflation and rate hikes sends whipsawing, eyeing a test of the year-to-date high of 146.56.

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• Powell’s hawkish tone on inflation and rate hikes sends USD/JPY whipsawing, eyeing a test of the year-to-date high of 146.56.

The pair currently trades last at 146.556.

The previous day high was 145.96 while the previous day low was 144.6. The daily 38.2% Fib levels comes at 145.44, expected to provide support. Similarly, the daily 61.8% fib level is at 145.12, expected to provide support.

USD/JPY rallies after remaining within familiar ranges in a choppy trading session before the US Federal Reserve Chair Jerome Powell hit the stand and delivered hawkish remarks, putting into the table additional tightening. The USD/JPY is whipsawing around 145.70-146.50 as it eyes a test of the year-to-date (YTD) high of 146.56.

At Jackson Hole, the Fed Chair Powell said they are prepared to continue its tightening cycle if appropriate. He emphasized that the US central bank would be data-dependent and proceed “carefully” when deciding to pause or raise borrowing costs.

Regarding inflation, he said there’s a long way to go, despite two months of good data showing the disinflationary process continues towards the US central bank goal of a 2% target. Powell added they remain unsure about the neutral rate peak and acknowledged that monetary policy faces risks on both sides, meaning over and under-tightening.

Powell emphasized that the above trend growth and tightness in the labor market would be reasons to increase the Federal Funds Rate (FFR). He added that he expects July Personal Consumption Expenditure (PCE) at 3.3%, while core PCE at 4.3%.

The USD/JPY oscillated at around 145.70-146.10 on Powell’s remarks but gathered direction and rose to a new year-to-date (YTD) high of 146.63 before settling at around current exchange rates. Resistance on the upside is the 147.00 figure and the November 3 high at 148.45.

It should be said the Greenback (USD) is staging a recovery, as shown by the US Dollar Index, which turned positive, sits at 104.360, gains 0.35%, underpinned by US Treasury bond yields, which are beginning to track higher.

Technical Levels: Supports and Resistances

USDJPY currently trading at 146.57 at the time of writing. Pair opened at 145.83 and is trading with a change of 0.51 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 144.26, 50 SMA 142.77, 100 SMA @ 139.74 and 200 SMA @ 136.65.

The previous day high was 145.96 while the previous day low was 144.6. The daily 38.2% Fib levels comes at 145.44, expected to provide support. Similarly, the daily 61.8% fib level is at 145.12, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 144.97, 144.11, 143.62
• Pivot resistance is noted at 146.33, 146.82, 147.68

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