USD/JPY - Dollar-yen, daily - 03/01/2024 (GMT)

Against most majors apart from the yen, the dollar has been more-or-less steady over the last few days. Rising PCE, as announced on Thursday, 29 February, was widely expected, so for now, the dominant expectation remains that the Fed will start to cut its funds rate from June. Unemployment claims have started to rise, pointing to a slightly less strong job market.

The price broke below the rising wedge on 29 February, but it remains to be seen whether this is the start of a significant retracement or just a brief kneejerk to the Japanese officials’ comments. However, weaker momentum upward in the last fortnight combined with an overbought signal from the slow stochastic and declining ATR would often be interpreted as signaling a new sideways trend or downtrend. The main focus of data for dollar-yen now is next Friday’s NFP.