USD/JPY Sees Rebound After Recent Declines; Consolidation Expected Ahead
Currency Market Update – October 2023
The USD/JPY pair experienced a notable rebound today, reflecting a modest recovery in the US dollar following consecutive session losses. As reported by Danske Bank’s foreign exchange analyst, Mohamad Al-Saraf, the currency pair was last observed trading at 151.87 levels.
Current Market Dynamics
The recent resurgence of the USD/JPY comes in the wake of a period marked by back-to-back declines. Market dynamics suggest a phase of consolidation is likely in the near term, as daily momentum indicators are currently flat, with the Relative Strength Index (RSI) showing a slight uptick.
Traders are advised to monitor key resistance levels at 152.70, which corresponds with the 200-day moving average (DMA). If the pair breaks through these levels, further resistance is seen at 153.50/85, aligned with the 21 and 100 DMAs, and a more substantial barrier at 154.30. Conversely, support levels have been identified at 151.50, which correlates to the 38.2% Fibonacci retracement of the September low to January high, and at the psychological 150 mark.
Tariff Concerns Impacting JPY Outlook
In broader economic news, lingering tariff concerns are complicating the outlook for the Japanese yen. There are apprehensions that reciprocal tariffs could adversely impact Japan’s economy. Japan has initiated discussions to obtain exemptions regarding the proposed tariffs unveiled by former President Trump. Notably, Japan’s Minister of Foreign Affairs, Takeshi Iwaya, highlighted the issue of automobile tariffs and sought exclusion from a 25% tariff on imported steel and aluminum products during the Munich Security Conference last Friday.
These tariff discussions could play a significant role in shaping the currency’s movements in the upcoming weeks, adding layers of complexity to an already volatile trading environment.
Conclusion
As investors navigate through these developments, it is crucial to approach the foreign exchange markets cautiously. The information presented here contains forward-looking statements that involve several risks and uncertainties. Market observers are reminded that the assets discussed should not be seen as direct investment recommendations. Comprehensive research and analysis should precede any investment decisions, as trading in open markets inherently carries risks, including the potential loss of capital.
The author of this article emphasizes that they hold no positions in any of the stocks mentioned and have no financial relationships with the companies referred to herein. FXStreet is not registered as an investment advisor, and this article is intended for informational purposes only.
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