USD/JPY tests 145 as dollar struggles to catch a break
Aug 21 (Reuters) -The dollar can’t seem to catch a break at present, which in turn has seen USD/JPY trade below 145, albeit briefly during the APAC session, with the key to the U.S. currency's near term outlook now residing in Jackson Hole.
There was more interest than usual on the annual payrolls revisions, though a downgrade of 818k was in the middle of the range of estimates.
Meanwhile, the data is also somewhat stale given it is for the year prior to March 2024 and thus the impact on the Fed’s policy outlook should be minimal.
Focus remains squarely on the upcoming Jackson Hole speeches. Though, with the dollar now the most oversold since July 2023 – according to the 14-day RSI – further weakness is likely to be harder to come by, unless of course, Fed Chair Jerome Powell, clearly keeps the risk of a 50bps September cut on the table.
However, with recent U.S. data pushing back on the growth scare hyperbole that stemmed from the July non-farm payrolls report, a signal that the Fed will alter policy gradually appears more likely. In which case, that may provide some relief for the greenback.
For now, USD/JPY support resides at 145, whereby a firm break would open up for a test of 144. On the topside, the 55-hour MA (146.07) marks near-term resistance, with 146.97-147.08 above also capping rebounds.
For more click on FXBUZ
USDJPY hourly chart https://tmsnrt.rs/3WX8XwE
Dollar RSI https://tmsnrt.rs/3Xnz4hP
(Justin McQueen is a Reuters market analyst. The views expressed are his own.)
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