At the start of the week, the Tokyo market saw a rise in the US dollar after President Trump announced a 25% tariff on aluminum and steel for all countries. The USD/JPY pair climbed nearly 1 yen to 152.21.
In the European market, stock prices went up, and investors took more risks, causing the yen to weaken further. This pushed USD/JPY up to 152.53.
However, the price struggled to go higher because the 152-yen range is an important resistance level, including the 38.2% Fibonacci retracement and the 200-day moving average. As a result, the pair dropped back to the mid-151 range.
In the New York market, stocks rebounded after falling last week, and all three major stock indexes rose. This led to more risk-taking, pushing USD/JPY back above 152 by the market close.
Now, the fear of inflation caused by Trump’s tariffs seems to be fading, weakening the demand for the US dollar. On the other hand, expectations of an early interest rate hike by the Bank of Japan could put pressure on USD/JPY to fall.
Traders may consider selling when the price moves back to the upper 152-yen range.
Expected USD/JPY Range: 152.80 – 150.30
Note: The above information does not guarantee any profits. Please make your own decisions before trading.