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Consumer confidence is a key indicator that can have a significant impact on the stock market. A downward trend in consumer confidence could signal reduced spending, which in turn could support a more dovish Fed rate path. This could lead to expectations of multiple Fed rate cuts in 2024, potentially pushing the USD/JPY below 142.5. However, if the Index falls below 100, fears of a US hard economic landing could intensify, leading to a flight to safety. It’s important to note that private consumption contributes over 60% to the US economy.
When it comes to the short-term forecast for the USD/JPY, investors should pay attention to a few key factors. The services PMI from Japan, US consumer confidence figures, and central bank commentary will all play a role in determining the direction of the USD/JPY. Keep an eye out for weaker-than-expected PMI numbers and cautious comments from the BoJ Governor, as these could impact Yen demand. A modest decline in US consumer confidence, on the other hand, may support a USD/JPY move toward 145.
For a more technical analysis of the USD/JPY, our experts recommend monitoring the daily chart. The USD/JPY is currently below the 50-day and 200-day EMAs, confirming bearish price signals. A return to 145 could signal a move toward the 145.891 resistance level, with a potential break above that level giving the bulls a chance to challenge the 50-day EMA. Keep an eye on key indicators like the 14-day RSI, which currently sits at 46.36, indicating a possible fall to the 141.032 support level before entering oversold territory.
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