Japanese yen technical outlook: What’s next for USD/JPY after BoJ?
USD/JPY is approaching crucial support; USD/JPY’s slide appears to be losing steam and what is the outlook and the key signposts to watch?
US dollar, Japanese yen, USD/JPY - technical outlook:
USD/JPY (大口） is approaching crucial support; USD/JPY’s slide appears to be losing steam and what is the outlook and the key signposts to watch?
Importantly, the retracement of the intraday gains shows how strong the downward momentum has been in USD/JPY recently. As the weekly chart shows, the Moving Average Convergence Divergence indicator is at its lowest at least since 2018 – a sign of the extent of bearishness.
USD/JPY 240-minutes chart
Having said that, as the previous update noted, the multi-week slide is losing steam. Put in another way, Wednesday’s jump could be a warning sign that the tide could soon be turning (up) for USD/JPY (大口） as it approaches strong support on the 89-week moving average, coinciding with the May 2022 low of 126.30.
So far, USD/JPY hasn’t broken any important resistance, beginning with the 89-period moving average on the 240-minutes chart (see chart) – rallies in recent weeks have stalled at the moving average.
Any break above the 89-period moving average on the 240-minute chart, near the upper edge of a declining channel since November, would be an indication that the three-month-long downward pressure is fading.
Already, as noted last week, fresh lows in price on the daily charts haven’t been associated with fresh lows in momentum, suggesting that the slide is losing steam.
USD/JPY daily chart
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