USD/JPY has been quite impulsive with the bullish gains without any signs of a strong pullback against the trend since it broke above 110.50 recently. JPY has been struggling with the BOJ's long-term plans to develop the economy whereas USD momentum has increased impulsively.
Today Japan's Trade Balance report was published with an increase to 0.55T from the previous figure of 0.17T which was expected to decrease to 0.11T. The positive economic report did not quite help the currency to gain a bit of momentum against USD which lead the market to more indecision and insecurity trading on the JPY side. Though there are several economic reports to be published this week in Japan, the upcoming gains against USD are quite uncertain due to the mixed forecasts of those reports.
On the USD side, ahead of the FOMC Meeting on Thursday, FED Chair Powell will speak about the upcoming economic developments, interest rates and monetary policies.USD is quite strong and is expected to extend its gains further against JPY in the coming days. Today FOMC Member Bostic is going to speak about the upcoming decisions on the interest rates and Monetary Policies which is expected to be quite neutral in nature.
As of the current scenario, USD is expected to extend gains against JPY whereas any negative outcome on the FOMC Meeting and FED Chair Powell's speech can lead to certain gains on the JPY side. Otherwise, USD is expected to dominate over JPY further in the coming days.
Now let us look at the technical view. The price is currently quite impulsive with the gains which was expected to have certain retracement towards 110.50 area before surging up higher towards 112.00 area. The dynamic level of 20 EMA is still quite far away from the current price and expected to pull the price down for certain retracement before pushing it higher again. As of the current market momentum, the certain bearish pressure may be observed in the pair after 112.00 is rejected with a daily close. As the price remains above 110.50, further bullish pressure is expected in the coming days.
