The USD/JPY pair is bearish on the medium-term outlook, according to our technical and fundamental analysis. The U.S. Dollar will fall, as Fed officials are prepared to lower their benchmark rate by a quarter percentage point from its current range between 2.25% and 2.5%. A rate cut could also end the runoff of the Fed's $3.8 trillion asset portfolio.
Even if the pair is consolidating around 108, the trend continues to be down in the next weeks towards about 107.
The stochastic oscillator on the daily chart indicates an overbought level. The RSI oscillator is below 50 on the weekly chart, and this suggests a downtrend for this pair.
The most important data of this week:
Japan Jobless Rate (2.4% expectation); ( 2.4% previous)
BOJ rate decision (-0.1% expectation); ( -0.1% previous)
BOJ Outlook Report
US ADP Employment Change (150k expectation); (102k previous)
FOMC rate decision (2.25% expectation); ( 2.5% previous)