Fed's Rate Cut Path: Experts Highlight Labor Market

The Fed's rate‑cut trajectory, highlighted by a robust labor market, indicates a high likelihood of short‑term support for the USD against the JPY. A 24‑hour rise of 0.14%, an RSI hovering around 50, and a MACD above its signal line all point to current buying strength. However, if the Fed takes an unexpected decision, pressure on the JPY could intensify. Consequently, USDJPY is expected to trend slightly upward over the next 1–3 days.

The Federal Reserve's rate cut plan could keep the dollar under mild pressure in the short term. Current technical indicators show that the DXY is above its 20- and 50-day moving averages, with the RSI at a moderate level, supporting an overall uptrend. However, expectations of a rate cut may keep investors alert to the possibility of dollar depreciation. Therefore, within the next 1-3 days, the DXY is likely to experience a slight decline or remain stable without a significant reaction. Market participants will continue to adjust their positions by closely monitoring the Fed's decision.

The Nikkei 225 index experienced a decline of nearly 2% from its previous close, settling at 59,509. The RSI stands at 46.6, indicating neutral territory, while the MACD line remains below the signal line, though the gap has narrowed. The price is trading just below the 20-day and 50-day moving averages. The headline links the Fed's rate cut trajectory to the labor market, keeping rate cut expectations alive but lacking concrete data or decisions, which may not provide short-term direction. With no clear signal from technical indicators and the price fluctuating around critical averages, the short-term outlook is assessed as neutral.

NDX has risen 2.1% in the last 24 hours, demonstrating strong short-term momentum. The RSI at 60.6 is not yet in overbought territory, suggesting further upside potential. Although the MACD is below the signal line, it remains in positive territory, indicating that the trend has not yet weakened. The price is trading above the 20- and 50-day moving averages, which are trending upward. Expectations of a Fed rate cut, with a particular emphasis on the labor market, are creating a favorable environment for the tech-heavy NDX. However, the MACD remaining below the signal line and elevated RSI levels bring some risk of short-term consolidation.