USDJPY remains positive, awaiting US inflation data and the Fed decision for new direction signals.

USDJPY remains constructive, probing above the 157 barrier (the upper boundary of the triangular consolidation and the 61.8% Fibonacci retracement of the 160.19/151.85 bear-leg). However, ranges are narrowing ahead of key releases this week, including the US inflation report and the Fed rate decision, both due on Wednesday.

The dollar is on the front foot following stronger-than-expected US jobs data, fueling speculation about further delays in the Fed’s first rate cut, with bets gradually shifting from September to the November policy meeting.

US May CPI numbers and the Fed’s dot plots will be in focus for fresh direction signals, with prevailing expectations for a hawkish scenario that would keep the dollar strong.

Conversely, the Bank of Japan’s policymakers meet on Friday and may provide more details about their QE tapering plan. While the central bank is expected to keep rates unchanged this time, there are growing expectations for a rate hike in July and a total increase of 25 basis points by the end of the year.

More hawkishness from the BoJ, along with their readiness to intervene if necessary to support the yen, could provide some support to the Japanese currency.

Technical studies on the daily chart are mixed, with moving averages remaining in a bullish configuration, positive momentum fading, and the stochastic indicator overbought.

A sustained break above 157.00 would provide an initial positive signal, boosting the price and targeting 157.70 (May 29 lower top) and 158.22 (76.4% Fibonacci retracement of 160.19/151.85).

Failure to clear the 157 pivot would increase downside vulnerability, risking a test of the first lower pivots at 156.10 (daily Tenkan-sen) and 155.76 (daily cloud top).

Res: 157.70; 158.22; 159.00; 160.19
Sup: 156.83; 156.40; 156.10; 155.76