The USD/JPY pair consolidated in a narrow range of around 149.00 as investors remained baffled between supporting the US Dollar and the Japanese Yen amid a risk-off mood. Deepening tensions between Israel and Hamas have prompted expectations of participation from other Middle East economies in the war, which has impacted the demand for safe-haven assets heavily. USD/JPY remains sideways as the upside is being restricted due to hopes of an intervention by the Bank of Japan (BoJ) in the FX domain to support the Japanese Yen while the downside is well-supported as the surprisingly upbeat Nonfarm Payrolls (NFP) report has prompted expectations of one more interest-rate hike from the Federal Reserve (Fed).
This week, the major is expected to remain volatile as the US Consumer Price Index (CPI) data will be released on Thursday. The core consumer inflation is foreseen to grow at a steady pace of 0.3% in September. USD/JPY trades inside the ‘flash clash’ candlestick formed on October 3, which was misinterpreted as BoJ’s intervention. The clarification from Bank of Japan’s (BoJ) money market data that the flash crash move was not due to the central bank’s intervention. The asset trades closely to the 50-period Exponential Moving Average (EMA) at 149.00, which indicates a sideways move ahead. Also, the Relative Strength Index (RSI) (14) oscillates in the 40.00-60.00, indicating that investors await a fresh trigger. Going forward, a decisive break above October 03 high at 151.16 would drive the asset toward 21 October 2022 high around 152.00 and a fresh multi-decade high of 155.00. On the contrary, a breakdown below October 3 low at 147.32 would expose the major to September 11 low at 145.90, followed by September 01 low at 144.44.