The USDJPY fell in the Asian session in the process extended below the low price from last week at 147.14 and then the 100-day moving average at 146.98. The move below the 100-day moving average was the 1st since April 2023. It should have led to lower levels and indeed the price did extend down to 146.66. However, there was some buying and when the price went back above the 100-day moving average, sellers turned back to buyers. There was one final retest before more buying entered.
A comment from BOJs Adachi said that a big policy decision will have to wait until next year’s wage talks, and it’s difficult to end negative rates until a positive wage-inflation cycle helps to weaken the JPY and lead to more buying.
What next?
Getting above the 148.000 level would be the next target. That level was a swing low going back to November 22 and was tested again yesterday in the Asian session and found support buyers before breaking lower later in the day. A move above that level should increase the bullish bias a bit.
Ultimately if the fail break below the 100-day moving average is the low at 146.66, the 38.2% retracement of the move down from the November high comes in at 148.66. That is still around 90 pips away, but if the buyers are to want to take more control they need to get and stay above that 38.2% retracement. Absent that it’s just a correction in a more negatively biased market at least in the short/medium-term.
This article was written by Greg Michalowski at www.forexlive.com. Source