The release of the BoJ’s meeting minutes, which showed the central bank members’ relentless focus on achieving BOJ’s price target, did nothing to move the USDJPY currency pair in the morning session. The Gopher declined a negligible 0.1% after the report showed that some members said there were some encouraging signals that the BoJ’s price objective may be met and support the continuation of the current monetary policy.
The minutes slightly impacted the Japanese Yen, but the Gopher quickly found support on the weakening US Dollar as investors bets that the greenback might have peaked with the US interest rates. The markets are still digesting the dovish remarks by the Fed’s Chair, Jerome Powell, on a potential rate pause to assess the consequences of the recent hikes. US inflation data on Wednesday will be in focus for the investor this week and might give a glimpse into the potential Fed monetary policy path.
The 4H chart shows that the Gopher is consolidating around the daily pivot point at 134.619 after the bears failed to break below the dynamic support that has formed. The bulls could be hoping the failure to break below the dynamic support could spur the bulls’ run towards the 135.353 resistance. The break above the initial resistance level would bring the 23.60% Fibonacci retracement level and the 136.134 resistance level into play.
However, should the bears regain control after the consolidation, the immediate barrier to the bears’ rally would be the firm dynamic resistance level. A sustained break below the dynamic support would leave the 133.879 and 133.381 support levels at the bears’ mercy, with the 50% Fibonacci retracement level providing friction between the levels.
With the lack of economic indicators from both economies ahead of the inflation data from the US this week, market sentiment could continue to drive the currency pair during the session. Therefore, a short-term trading opportunity could exist as the bulls push the price action above the 135.353 resistance level or the bears pull the price below the 133.879 support level.
Sources: TradingView, Reuters.
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