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USD/JPY Rallies to Two-Week High Near 149 as Strong U.S. Data Lifts Dollar
Traders' Opinions
Summary:
Very short summary: USD/JPY surged to a two-week high near 149.00 on Wednesday, boosted by upbeat U.S. employment and GDP data, with markets now closely eyeing the Fed's policy guidance amid growing rate cut speculation.
Buy
CLOSEDUSDJPY
End Time
149.000
Entry Price
151.500
TP
147.500
SL
150.796 +1.274 +0.85%
849
Points
Profit
147.500
SL
149.849
CLOSING
149.000
Entry Price
151.500
TP
The USD/JPY currency pair staged a decisive rebound in the American session on Wednesday, erasing earlier losses to trade at a fresh two-week high around the 149.00 handle. This renewed strength in the greenback came on the back of stronger-than-expected U.S. economic data, which fueled market optimism about the resilience of the American economy and tempered some of the recent dovish speculation surrounding the Federal Reserve's next policy moves.
At the time of writing, the U.S. Dollar Index (DXY), which tracks the performance of the greenback against a basket of major peers, was up 0.63% on the day at 99.52—marking its highest level since late May. The rally in the dollar helped push USD/JPY through a key resistance level at 148.20, with bulls now eyeing a sustained breakout above the psychologically significant 149.00 threshold.
Wednesday’s data releases provided a notable catalyst for dollar bulls. The U.S. private sector added 104,000 jobs in July, according to ADP, sharply rebounding from June’s surprising 23,000 decline and beating the consensus forecast of 78,000. While the headline number was not stellar by historical standards, the positive turnaround helped reassure investors about the labor market's underlying strength—particularly ahead of Friday’s more comprehensive nonfarm payrolls report.
Complementing the upbeat employment figures, the U.S. Bureau of Economic Analysis reported that GDP expanded at an annualized rate of 3.0% in the second quarter—well above expectations of a 2.4% increase. The robust growth print reinforced the narrative that the U.S. economy continues to outperform global peers despite higher interest rates and persistent inflationary pressures.
In my view, this data underscores the Federal Reserve's balancing act: while inflation has been cooling, the economy has yet to show significant signs of deterioration. This complicates the central bank's efforts to engineer a soft landing without overtightening policy.
Markets are now keenly awaiting the Federal Reserve’s policy statement due later in the session. The central bank is widely expected to leave interest rates unchanged following its July meeting, but traders are bracing for potential shifts in forward guidance—especially in Chairman Jerome Powell’s press conference.
According to the CME FedWatch Tool, market participants are pricing in a roughly 60% probability of a 25 basis-point rate cut at the Fed’s next meeting in September. However, today’s strong macro data may challenge that pricing, particularly if Powell strikes a more data-dependent or hawkish tone.
As a financial reporter, I find this dynamic particularly compelling. The Fed’s challenge is no longer just about inflation—it’s about managing expectations. The soft landing narrative depends not only on economic fundamentals but also on how effectively the Fed can communicate its path forward. In this sense, Powell’s tone today could carry more weight than the rate decision itself.
Technical Analysis 
From a technical standpoint, USD/JPY's bounce reflects a resumption of the broader uptrend that has been in place since early 2023. After a brief intraday dip triggered by overbought signals on the Relative Strength Index (RSI), the pair found fresh buying interest near the ascending support trendline and the 50-period Exponential Moving Average (EMA50), reinforcing the bullish setup.
The pair decisively broke through the 148.20 resistance level, a key barrier that had previously capped upside attempts. If USD/JPY can sustain momentum above 149.00, the next upside targets lie at 149.50 and the psychological round number of 151.00, which has historically acted as a line in the sand for Japanese policymakers concerned about yen weakness.
TRADE RECOMMENDATION
BUY USDJPY
ENTRY PRICE: 149.00
STOP LOSS: 147.50
TAKE PROFIT: 151.50
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