USDJPY – bulls hold grip ahead of key US data

USDJPY continues to move in near-term sideways mode, following Tuesday’s short-lived spike to new 2023 high (147.37), awaiting fresh direction signals from key US economic data, due today / Friday.

Markets look for fresh information about inflation (Core PCE index is Fed’s preferred inflation gauge) and situation in the US labor sector (weekly jobless claims / NFP report) which will strongly contribute to Fed’s policy decisions in the near future.

The latest comments from Fed policymakers showed slight dovish shift, on signals that the economy is slowing and plans for further tightening should be put on hold, as well as remarks that the monetary policy is tight enough to bring inflation back to 2% target over a reasonable period, with interest rates to remain elevated for extended period.

On the other hand, markets expect the central bank to stay on hold in September’s policy meeting, but with growing bets for another 25 basis points hike in November.

Bullish daily studies continue to underpin the action which needs another weekly close above Fibo barrier at 146.10 (76.4% of 151.94/127.22) to reinforce overall bullish bias and keep focus at the upside.

Dips should find ground above rising 20DMA (145.16) to keep larger bulls intact.

Caution bearish acceleration below 144.54 trough (Aug 23) which would weaken near-term structure and generate initial signal of rally’s stall.

Res: 146.53; 147.00; 147.37; 147.56
Sup: 145.55; 145.16; 144.54; 143.99