Fundamental analysis USDJPY for 28.02.2024

After the growth in the previous day, the dollar slightly decreased against the yen and is currently trading at 150.480. 

Such price dynamics is formed amid expectations of news from the Bank of Japan and US economic data. Japan's core CPI came in higher than expected, prompting speculation that the Bank of Japan's ultra-soft interest rate policy will end. This sentiment was also fueled by Japanese inflation data in January, which rose above expectations, raising the likelihood that the BOJ will make policy changes as early as April. Nevertheless, the BOJ warned against expecting a sharp reversal from a negative rates stance to a hawkish stance. 

Meanwhile, in the United States, economic growth in the fourth quarter was impressive at an initially estimated 3.3%. This data could influence the Fed's interest rate decisions, as higher interest rates would signal the need for additional measures to control inflation, which would affect the spending patterns of consumers. The U.S. is also expected to release trade and inventory data for the GDP report. Speeches by Fed officials, including Vice Chairman John Williams and FOMC members Rafael Bostic and Susan Collins, will be key to influencing market sentiment, especially their comments on inflation and rate changes. 

In the near term, traders will focus on the upcoming release of the Durable Goods Price Index for further clues on the Fed's rate hike trajectory, which could limit the upside potential of the USD/JPY pair 

Technical Analysis and Scenarios:

Given the current price of 150.480, the Alligator indicator suggests that the market is in an uptrend as its hungry maw (blue line) is below the lips and teeth (green and red lines). However, the Awesome Oscillator (AO) and Accelerator Oscillator (AC), which are in the green zone near the zero level, indicate a strong buy signal, confirming the initial upward signal from the Alligator. 

Main Scenario (BUY)

Recommended entry level: 150.800

Take Profit: 151.000

Stop Loss: 150.700

Alternative scenario (SELL)

Recommended entry level: 150.000

Take Profit: 149.410

Stop loss: 151.250