FX.co ★ Safinkhan | USD/JPY

USD/JPY Technical Analysis: The USD/JPY pair is holding steady around the 149.50 mark, staying just below the key 150.00 resistance level. If the pair breaks above this, we could see a rally towards 150.40 or higher. On the flip side, 149.00 is providing immediate support, with a stronger demand zone near 148.60. Looking at the charts, the RSI is edging closer to the overbought zone in the 4-hour timeframe, which makes me think the bullish momentum might be losing steam. The 50-day EMA around 149.20 is offering solid support, and the pair remains above the 200-day EMA, so the longer-term trend still looks bullish. Fundamental Analysis: On the fundamental side, the dollar remains strong thanks to the Federal Reserve's hawkish stance. That said, recent comments from Fed officials hinting at a cautious approach to further rate hikes seem to be limiting USD gains for now. Meanwhile, the Bank of Japan (BoJ) is sticking to its ultra-loose monetary policy, even as inflation in Japan rises. This ongoing divergence between the Fed and BoJ is one of the main factors supporting the pair's upward trend. I’m keeping an eye on the U.S. Jobless Claims data and the Japan National CPI release today. If U.S. data surprises on the downside, we could see some pressure on the dollar, but if Japanese CPI comes in higher than expected, it might spark some speculation about the BoJ’s next move, adding volatility.

Outlook: If it breaks above 149.50, I see the potential for the pair to test 150.40. If it drops below 149.00, it could target 148.60 and possibly 148.00. I’m also cautious about any sudden BoJ interventions, which have caught the market off guard before.