USD/JPY exhibits volatility contraction near 155.60 due to sidelined US Dollar

Source Fxstreet
May 20, 2024 10:39
  • USD/JPY is stuck in a tight range as the US Dollar consolidates.
  • The US Dollar stays on the sidelines despite Fed officials maintaining hawkish guidance on interest rates.
  • Investors await the US S&P Global PMI and Japan’s National CPI data.

The USD/JPY pair displays a sharp volatility contraction near 155.60 in Monday’s European session. The asset struggles for direction as investors shift focus to the Federal Open Market Committee (FOMC) minutes for the May meeting and commentaries from Federal Reserve (Fed) policymakers that will provide fresh guidance of the interest rate outlook.

S&P 500 futures have posted decent gains in the European session, exhibiting an increase in investors’ risk-appetite. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, consolidates in a tight range around 104.50.

Fed policymakers are expected to have used a hawkish tone on interest rates in the May’s policy meeting. The United States (US) Consumer Price Index (CPI) data disappointed Fed policymakers in the first three months, forced them to emphasize keeping interest rates at their current levels.

For the April month, US inflation has declined as expected and the labor demand remained soft, suggesting that the progress in inflation declining to the 2% target is on track. This has strengthened expectations for the Fed to begin reducing interest rates from the September meeting.

On the economic data front, investors will look to US S&P Global PMI data for May, which will be published on Thursday. The economic data will indicate whether the economy is effectively coping with the consequences of the Fed's higher interest rates.

Meanwhile, the Japanese Yen is under pressure as investors worry about the limited scope of policy tightening by the Bank of Japan (BoJ). Th Japanese economy was contracted at a faster pace in the first quarter of this year. Going forward, the National CPI data will provide fresh guidance on interest rates, which will be published on Friday. The National CPI excluding fresh goods is estimated to have declined to 2.2% from the prior reading of 2.6%.

USD/JPY

Overview
Today last price 155.71
Today Daily Change 0.06
Today Daily Change % 0.04
Today daily open 155.65
 
Trends
Daily SMA20 155.42
Daily SMA50 153.07
Daily SMA100 150.51
Daily SMA200 149.03
 
Levels
Previous Daily High 155.98
Previous Daily Low 155.25
Previous Weekly High 156.79
Previous Weekly Low 153.6
Previous Monthly High 160.32
Previous Monthly Low 150.81
Daily Fibonacci 38.2% 155.7
Daily Fibonacci 61.8% 155.53
Daily Pivot Point S1 155.28
Daily Pivot Point S2 154.9
Daily Pivot Point S3 154.55
Daily Pivot Point R1 156
Daily Pivot Point R2 156.36
Daily Pivot Point R3 156.73

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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