The USDJPY pair is edging closer to 152.00 in Tuesday’s European session but remains within Monday’s price range, indicating a sideways movement. Traders are holding back as they wait for Federal Reserve (Fed) Chair Jerome Powell’s testimony before Congress at 15:00 GMT, hoping for insights into the Fed’s future policies.
Investors want to know how long the Fed will keep interest rates between 4.25%-4.50%. Powell is unlikely to give a clear timeline on when the Fed might start cutting rates again, as he previously stated that rate changes would depend on inflation cooling or the job market weakening.
Market watchers also want to hear Powell’s thoughts on the potential impact of Trump’s 25% tariffs on steel and aluminum imports, which take effect on 12th Mar. Many believe these tariffs could push inflation higher in the US.
Meanwhile, the Japanese Yen’s strong rally in January has stalled. Investors had been buying the Yen, expecting that the Bank of Japan (BoJ) would raise interest rates to narrow the gap with other central banks. BoJ officials have hinted at another possible rate hike if the economy and inflation continue to meet their forecasts.
AUDJPY – D1 Timeframe
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The price action on the daily timeframe chart of AUDJPY is approaching the resistance trendline, and the moving averages are currently in a bearish array. The recent low created a structure break, indicating the current trend is bearish. The bearish sentiment is the safer option, considering the additional confluence from the pivot zone.
AUDJPY – H4 Timeframe
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The 4-hour timeframe chart of AUDJPY breaks down the daily timeframe sentiment to reveal the supply zone of the SBR (sweep-break-retest) pattern buried within the daily timeframe pivot region. Further confirming the bearish sentiment.
Analyst’s Expectations:
Direction: Bearish
Target: 94.5
Invalidation: 97.206
CONCLUSION
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