US Economic Calendar: Personal Income and Expenditures Report
Later in the Friday session, the US Personal Income and Expenditure Report warrants investor attention.
Economists forecast personal income and spending to increase by 0.5% and 0.6% in March, respectively. Personal income and spending rose by 0.3% and 0.8% in February.
Moreover, economists expect the Core PCE Price Index to increase 2.6% year-on-year in March. In February, the Core PCE Price Index rose by 2.8% year-on-year.
Upward personal income/spending trends and sticky inflation could reduce investor bets on multiple 2024 Fed rate cuts. Higher wages would increase disposable income. Upward trends in disposable income could fuel consumer spending and demand-driven inflation. A higher-for-longer Fed rate path could raise borrowing costs and reduce disposable income.
Other US economic indicators include pending home sales and finalized Michigan Sentiment numbers. A market revision to the preliminary Michigan Consumer Sentiment and Inflation Expectations Indexes could move the dial.
Short-term Forecast
Near-term trends for the USD/JPY hinge on the Bank of Japan and the US Personal Income and Expenditures Report. A hotter-than-expected US Personal Income and Expenditures Report could tilt monetary policy divergence toward the US dollar. However, investors should also consider the Bank of Japan press conference.
USD/JPY Price Action
Daily Chart
The USD/JPY hovered comfortably above the 50-day and 200-day EMAs, affirming the bullish price signals.
A USD/JPY breakout from the April 25 high of 155.747 would give the bulls a run at the 156 handle.
Investors should consider the Bank of Japan press conference and the US Personal Income and Expenditures Report.
Conversely, a USD/JPY fall through the 155 handle could signal a drop toward the 50-day EMA and the 151.685 support level. Buying pressure may intensify at the 151.685 support level. The 50-day EMA is confluent with the support level.
The 14-day RSI at 79.13 shows the USD/JPY in overbought territory. Selling pressure may increase at the April 25 high of 155.747.
