USDJPY Short Idea towards 144.50 with explanation!
The Japanese Yen benefits from the hawkish stance of the Bank of Japan (BoJ) on Tuesday, although it lacks follow-through. The reduced bets on an imminent interest rate cut by the Federal Reserve (Fed) provide support for the US Dollar and the USD/JPY pair. The 147 area could act as a crucial point, and if decisively breached, it might trigger aggressive technical selling, dragging the USD/JPY pair towards the 144.00 level towards the next liquidity zone. On the flip side, the round figure of 148.00, followed by the 148.15-20 region, now seems to act as an immediate hurdle before the recent weeks' high around the 148.80 zone touched on Friday. Investors seem convinced that the Bank of Japan (BoJ) will show little willingness to end negative interest rates or make changes to the Yield Curve Control (YCC) policy at the end of a two-day meeting on Tuesday. This, along with a generally positive tone in equity markets, weakens the safe-haven JPY. Additionally, decreasing odds of a rapid interest rate cut by the Federal Reserve (Fed) act as a tailwind for the US Dollar (USD) and help the USD/JPY pair attract some buying near the 147.75-147.70 area. Furthermore, persistent concerns about slowing economic growth in China and the risk of a further escalation of geopolitical tensions in the Middle East might limit any optimistic movement in the markets. In the market, I have defined a hypothetical short scenario on the H4 timeframe, aiming to wait for further downside below the 147 level before considering a possible retracement to the 0.70 Fibonacci level. Only then will I enter the market to evaluate a short entry if the right confirmations persist on the M15 timeframe, with a target of 144.50, which is the first swing zone with excellent liquidity for the price to recover. Greetings and happy trading to all.
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