USDJPY, AUDUSD and NZDUSD Forecast: Assessing the Impact of Fed’s Rate Decisions

Key Insights

• Asian currencies strengthen as expectations of Fed halting rate hikes rise.
• Yuan jumps 0.5% after PBOC’s aggressive midpoint fix and liquidity boost.
• RBA’s dovish signals post-rate hike push AUD up 0.6%.
• USD weakness allows JPY to breach below 150 level, gaining 0.5%.
• Anticipation of Chinese support for the property sector enhances market confidence.

Quick Fundamental Outlook

Asian currencies gained on Monday as the dollar weakened on expectations that the Federal Reserve may halt interest rate hikes. The Chinese yuan rose 0.5%, bolstered by a strong PBOC daily midpoint fix and the bank’s decision to maintain low loan rates and inject liquidity into the market.

Anticipated Chinese policy support for the property sector, a key economic area, also lifted sentiment. The Australian dollar appreciated 0.6% ahead of the Reserve Bank of Australia’s meeting minutes, which are eyed after a modest rate hike with dovish signals for the future.

Meanwhile, the Japanese yen strengthened by 0.5%, moving below the 150 threshold against the dollar, benefiting from the reduced likelihood of further U.S. rate increases and finding support despite the Bank of Japan’s continued low-rate stance.

This shifting dynamic could imply a boost for the AUD/USD and NZD/USD, while potentially easing pressure on the USD/JPY as it dips below key resistance levels.

USD/JPY Prices Forecast

The USD/JPY pair has been navigating a tight range, currently positioned just below the 149.00 mark, reflecting a marginal 0.03% movement within the last 24 hours. On the technical front, the currency pair finds its pivot point around 148.955, with immediate resistance looming at 149.521.

Further north, additional resistance levels are identified at 150.106 and 150.858, presenting potential barriers to upward momentum. Conversely, support levels are established at 148.779, followed by 148.162 and more substantially at 147.553.

The Relative Strength Index (RSI) is hovering around 32.57, flirting with the oversold boundary, which typically suggests a potential for price reversal or increased buying activity.

The 50-Day Exponential Moving Average (EMA) is positioned at approximately 148.954, with the price wavering around this indicator, indicating a neutral to slightly bearish sentiment in the short term.

In summary, the overall trend for the USD/JPY appears neutral to bearish, with a cautious outlook prevailing. Investors are advised to watch for a potential test of the 149.521 resistance or a decline towards the 147.553 support in the upcoming sessions.

AUD/USD Prices Forecast

The Australian Dollar (AUD) against the US Dollar (USD) presents a vibrant picture in the currency market, with the pair currently trading near the 0.6550 level. The AUD/USD pair has maintained a slender ascent, registering a 0.03% rise in the last couple of hours.

Key resistance levels for the AUD/USD are mapped out at 0.65590, 0.66087, and 0.66543, which will need to be surmounted for a continuation of the uptrend. On the support end, the currency pair is buttressed by levels at 0.64508, followed by 0.63947 and further down at 0.63487. These levels are crucial for sustaining the currency pair’s current stability.

The Relative Strength Index (RSI) is currently indicating a value of 74.27, suggesting that the AUD/USD is in overbought territory and could be ripe for a potential pullback or consolidation in the short term. Additionally, the pair has been trading above the 50 EMA, currently at approximately 0.6512, reinforcing the bullish sentiment in the market.

As per the chart patterns, the AUD/USD has been following an ascending channel, which is typically a bullish continuation pattern. Given this formation, the implication is that if the currency pair continues to trade within this channel, it may well test the upper boundaries.

In conclusion, the overall trend for the AUD/USD is bullish, with the currency pair’s movement contained within an ascending channel. The short-term forecast suggests that the AUD/USD may test the next resistance at 0.65590, and if momentum persists, possibly challenge higher levels.

NZD/USD Prices Forecast

The New Zealand Dollar (NZD) against the US Dollar (USD) showcases a positive trend, currently experiencing a slight uptick of 0.07% as it hovers around the 0.60300 area.

The pair is building on its momentum following a ‘Three White Soldiers’ candlestick pattern, a bullish indicator. The NZD/USD has crossed the 50% Fibonacci retracement level from the recent high, signaling potential for further gains.

Currently, the pair finds immediate support near the 0.59534 Fibonacci level, with further foundational support at 0.59300 and 0.58967, which correspond to the 61.8% and 78.6% Fibonacci retracement levels, respectively.

On the upside, resistance is anticipated near the recent swing high of 0.60526, with additional barriers likely at the 0.60528 and 0.60500 psychological levels.

The RSI is notably above the midpoint at 52.44, suggesting that there is more room for upside before reaching overbought conditions. This aligns with the positive momentum indicated by the recent candlestick formation. The NZD/USD is also trading above a rising trend line, further reinforcing the bullish outlook.

The short-term forecast anticipates the NZD/USD to challenge the 0.60526 level, with a break above possibly inviting further bullish activity. Investors will closely monitor these levels for confirmation of the continuation or exhaustion of the current trend.

For a look at all of today’s economic events, check out our economic calendar.