USDJPY Analysis: The Fed’s head speech is expected on Wednesday

By IFCMarkets

The Fed’s head speech is expected on Wednesday

The upward movement means the weakening of the Japanese yen against the US dollar. The yen is included in the dollar index. Previously, the Japanese currency, along with the Swiss franc and gold, was in demand as a protective asset against the backdrop of global risks due to the Covid-19 pandemic. Several countries (France, Japan, New Zealand, Britain, and others) reported a decrease in the number of patients and the mitigation of quarantine measures. The US dollar is in good demand due to positive unemployment data for April and Non Farm Payrolls. They were better than expected. At the same time, the Japanese economic indicator Jibun Bank Composite PMI for April was worse than expected. This week important economic indicators such as Consumer Price, Retail Sales and Industrial Production will be published in the US. In Japan, Eco Watchers Survey, Machine Tool Orders, and Current Account will be released. All of this may affect the dynamics of USDJPY. On Wednesday, Jerome Powell, the head of the United States Federal Reserve, will give a speech. On Monday, the head of the Chicago Federal Reserve Bank (Chicago FRB) Charles Evans said that he does not expect negative Fed rates and a noticeable increase in inflation. Note that according to the American Commodity Futures Trading Commission (CFTC), demand for US dollars (net long) has been growing for the 7th week in a row and peaked in 2 months.

Summary of technical analysis

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