World shares climb on Fed cut bets, China gains; yen weakens

According to Brent Donnelly of Spectra Markets, the US dollar appears increasingly susceptible due to a combination of heavily skewed speculative positions and early signs of softening in certain US economic indicators.

Last week, the USD saw a general decline following a surprisingly dovish Federal Open Market Committee (FOMC) meeting. The Fed indicated a more significant reduction in quantitative tightening starting in June, and Fed Chair Powell consistently downplayed the likelihood of rate hikes. Additionally, recent data suggests that the Fed might maintain higher interest rates longer than previously expected, amidst weakening job and wage growth.

Conversely, the Japanese Yen lacks strong fundamental backing as the Bank of Japan (BoJ) may struggle to raise interest rates further due to slowing inflation. However, the Yen could find some temporary relief from hawkish tones regarding the scaling back of the quantitative easing program. Despite these factors, the USDJPY USDJPY pair is expected to maintain its upward trajectory, bolstered by the Fed's prolonged high-rate policy and positive global growth forecasts.

Technically:
On the daily chart, USDJPY has rebounded from a significant support zone between 152.00 and 152.85, reinforced by the convergence with the trendline. This movement was catalyzed by buyers capitalizing on the dip following the U.S. NFP report miss, which largely did not alter the broader market outlook.

For sellers to shift the market sentiment and initiate a bearish trend, the price must break below the trendline, specifically through the levels at 152.00 and 150.77. If achieved, this could set the stage for targeting new lows, with 146.00 as the primary objective.

Pivot line: 152.855
Resistance line: 155.77, 157.80, 159.82
Support line: 151.69, 150.77, 146.40

The expected trading range is between support 150.77 and Resistance 155.77

previous idea:

Comment:

The price reached the target we mentioned, about 250 pip, so now it looks to make a retest till 154.700