Key Moments
- USD/JPY extends a four-day rally and trades near 159.75 in Thursday’s European session.
- Meanwhile, the US Dollar Index (DXY) rises to 98.80 as higher oil prices lift inflation expectations.
- In addition, a triangle breakout and rising 20-day EMA support a move toward 160.46 and 161.00.
Dollar-Fueled Rally Lifts USD/JPY
USD/JPY continues to climb and holds near 159.75 during European trading. The pair has now advanced for four straight sessions.
Meanwhile, broad US Dollar strength supports the move higher. Rising oil prices, linked to Hormuz tensions, also boost the Greenback.
As a result, USD/JPY remains well bid and close to recent highs.
US Dollar Performance Against Major Currencies
The US Dollar shows gains against most major peers today. Notably, it performs strongest against the New Zealand Dollar.
| Base: USD | Change vs EUR | Change vs GBP | Change vs JPY | Change vs CAD | Change vs AUD | Change vs NZD | Change vs CHF |
|---|---|---|---|---|---|---|---|
| USD | 0.20% | 0.10% | 0.16% | 0.03% | 0.32% | 0.48% | 0.11% |
Overall, the heat map highlights broad USD strength. The left column shows the base currency, while the top row shows the quote currency. For example, USD/JPY reflects the Dollar’s change against the Yen.
Macro Drivers: Inflation Expectations and Fed Outlook
The US Dollar Index (DXY) trades near 98.80, up about 0.2% on the day. This marks its highest level in over a week.
At the same time, rising oil prices push inflation expectations higher. Consequently, markets see less urgency for Federal Reserve rate cuts.
According to CME FedWatch data, there is a 76.8% chance that rates stay unchanged at the December meeting.
Later today, investors will watch US PMI data. S&P Global releases preliminary April figures at 13:45 GMT. Expectations point to stronger activity in both services and manufacturing.
Focus Turns to BoJ as Yen Trades Mixed
The Japanese Yen shows mixed performance against major currencies. Meanwhile, traders shift focus to the Bank of Japan meeting on April 28.
USD/JPY Technical Outlook: Breakout Supports Bullish Bias
USD/JPY holds a firm tone after breaking out of a Descending Triangle pattern. In addition, the rising 20-day EMA near 159.11 supports the trend.
Momentum indicators also favor buyers. The RSI sits near 57, which signals steady but not overbought conditions.
On the upside, the pair may test the 160.46 level. A break above this point could open the path toward 161.00.
However, support lies near 159.41, followed by the 20-day EMA at 159.11. If selling pressure increases, the next key level appears near 157.64.
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