USD/JPY is expected to continue searching for direction in the overseas market. Influenced by the interest rate differential between Japan and the US, buying interest emerges when the pair dips. However, there is some dollar selling pressure in other pairs, such as EUR/USD, which is trading in the 1.0880 range. Last week’s US CPI and retail sales results have strengthened expectations for a US rate cut, putting downward pressure on the dollar. USD/JPY remains somewhat unstable, with sell orders around 156 yen capping the upside.
Nevertheless, the overall trend may still favor a stronger dollar and weaker yen. Buying interest is likely to appear in the lower 155 yen range. Speeches from Fed officials, including Governor Waller, could provide enough momentum for another attempt at the 156 yen level.
EUR/USD: Slight Euro Buying Trend
In EUR/USD, euro buying and dollar selling are slightly prevailing. However, caution is advised when approaching the 1.09 level. The pair is primarily moving in the upper 1.08 range, testing how far it can push into the 1.09 range.
EUR/JPY: Likely to Trade Around 169 Yen
EUR/JPY is expected to stay around the 169 yen level, with cautious sentiment toward exceeding 170 yen.
GBP/USD: Trading Around 1.2700
GBP/USD is trading around 1.2700. Expectations of early rate cuts in the UK are capping the upside, but the general trend favors a stronger pound. If buying interest strengthens in the upper 1.26 range, the pair may move towards 1.2750. GBP/JPY remains strong, though there’s caution about buying above 198 yen.
Strategy for the Week:
The strategy remains focused on selling USD. For USD/JPY, the significant options expiry at 156.00 on the 30th is expected to provide substantial resistance. The plan is to enter sell positions if the price rises toward this level.
