The USD/JPY and USD/CAD currency pairs are showing moderate gains following yesterday’s meeting of the US Federal Reserve. As expected, the American central bank kept its key interest rate unchanged. However, the tone of the accompanying statement and Jerome Powell’s comments were perceived by the market as less dovish than anticipated. Fed officials reaffirmed their willingness to maintain current rates for a longer period until there is clear evidence of easing inflationary pressure. The Fed Chair also noted that recent macroeconomic data does not provide sufficient grounds to begin a rate-cutting cycle in the coming months. These signals supported the US dollar and contributed to corrective moves in major currency pairs.

The USD/JPY pair has strengthened towards the 144.00 mark, reflecting the dollar’s overall resilience amid rising US bond yields. However, market participants remain cautious due to the potential for intervention by Japanese monetary authorities should the yen weaken further. The USD/CAD pair is trading above 1.38, still influenced by moderately weak oil prices and steady demand for the dollar.

Today, investor focus turns to the Bank of England’s meeting, where no change in the base rate is expected. However, the key market driver will likely be the tone of the regulator’s accompanying statement. Additional volatility may be triggered by Friday’s Canadian employment data release, which could significantly impact the Canadian dollar’s performance.

USD/JPY

Yesterday’s Fed meeting allowed USD/JPY buyers to find support just above 142.00 and push the pair more than 100 pips higher. Technical analysis suggests a potential continuation of the upward move towards the 146.00–145.30 area, as several bullish candlestick patterns have formed on the daily timeframe — including a "piercing line" on 22 April and a "bullish engulfing" pattern on 7 May.

The following news events could influence USD/JPY price action:

• Today at 15:30 (GMT+3): US Initial Jobless Claims
• Today at 15:30 (GMT+3): US Unit Labour Costs
• Today at 20:00 (GMT+3): Atlanta Fed’s GDPNow estimate
  

USD/CAD

Unlike USD/JPY, the USD/CAD pair has not shown a confident upward trend. Buyers managed to hold the pair above 1.3800, but daily volatility remains extremely low. Should the 1.3820–1.3800 zone become established as support, a move towards 1.3900 could follow. Conversely, a break below the multi-day support at 1.3750 may trigger a resumption of the medium-term downtrend.

The following events could affect USD/CAD pricing:

• Today at 17:00 (GMT+3): Bank of Canada Financial System Review
• Tomorrow at 15:30 (GMT+3): Canada Employment Change
• Tomorrow at 15:30 (GMT+3): Canada Unemployment Rate

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