USD/JPY: Japan-led sell-off faces FOMC test – DBS

💡 DMK Insight

The USD/JPY is at a critical juncture, and here’s why that matters: With the recent global USD sell-off, driven largely by Japan’s policy risks, traders need to keep a close eye on the 50-day moving average. This level often acts as a support or resistance point, and a break below could signal further weakness in the USD against the JPY. The upcoming FOMC meeting is another key event that could sway USD sentiment, especially if the Fed hints at a shift in monetary policy. If the Fed maintains a hawkish stance, it could provide a temporary boost to the USD, but if they lean dovish, expect the USD/JPY to face more downward pressure. It’s also worth noting that this dynamic might ripple through other currency pairs, particularly those correlated with the USD, like AUD/USD or EUR/USD. Traders should watch for volatility spikes as the FOMC meeting approaches, and consider positioning themselves based on how the market reacts to the Fed’s statements. Keep an eye on the 50-day moving average for immediate trading signals, as it could dictate short-term strategies.