The USDJPY pair is currently trading within a range, as economic conditions remain stable. Traders are looking for new factors to influence the market. Recently, the Federal Reserve decided to keep interest rates steady but predicted two rate cuts for 2025. This led to a small strengthening of the USD, but overall, the impact was minimal. Market participants expect further rate cuts as new data becomes available. On the other hand, the Bank of Japan held its interest rates at 0.5% and adjusted its bond-buying plans for 2026, which was expected by the market. These decisions did not cause significant market changes, and current volatility levels are low as traders await news that could shift predictions.

Technical Analysis Overview

Looking at the daily chart, the USDJPY pair is trading between 142.35 and 146.00. The price is close to 146.00, indicating a possible breakout or a bounce back to support. On the 4-hour chart, a bounce from the 144.30 zone shows potential upward momentum, targeting around 146.28. Sellers might be poised for a good opportunity at this resistance level. The 1-hour chart reveals the pair is trading mid-range between key levels, encouraging patience for better positioning. As the week wraps up, focus will turn to the upcoming Japanese Consumer Price Index (CPI) release, which may impact the market. The initial section highlights a consolidation phase for the USDJPY pair, with both central banks maintaining current interest rates. The Federal Reserve kept its rate unchanged but hinted at two cuts next year. This minor change didn’t significantly move the market, though the dollar saw a slight uptick as traders processed the news. Overall, currency markets reacted mildly, suggesting expectations had already been factored in.

Outlook and Preparations

At the same time, the Bank of Japan decided to keep its rate at 0.5% and made slight adjustments to its bond-buying schedule—actions that matched market expectations. This caused little immediate reaction, and volatility remains low. This situation shows that many traders are hesitant to make big moves without new information. From a technical viewpoint, the daily chart remains tightly confined within the 142.35 to 146.00 range. With price movements nearing the higher end, the market is at a point where it might either break above this level or face a rejection due to decreased buying interest. On the four-hour chart, a bounce at 144.30 gave early indications that bullish momentum may return, with targets just above 146. The hourly chart indicates indecision. The pair is straddling key levels, with neither buyers nor sellers willing to commit without a clearer direction. This uncertainty suggests that entering positions prematurely could be risky, especially without new data. Looking ahead, we anticipate volatility could arise from inflation developments, particularly the upcoming Japanese CPI data. If there are unexpected changes in core inflation, traders might have to quickly adjust their strategies. With the pair near resistance, sellers might find opportunities, especially if buying momentum decreases. For buyers, waiting for a confirmed breakthrough above resistance might be wiser to ensure participation in the next upward move. Trade setups in a sideways market often need macro data or a significant price shift to drive them. Until that occurs, a cautious approach is advisable. Create your live VT Markets account and start trading now.

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