USD/JPY Breaks 50-day SMA: A Technical Perspective
The USD/JPY pair has been experiencing downward pressure, partially due to a broad dollar weakness, which is evident as the yen gains traction against other major currencies. Currently, the pair is trading below its 50-day Simple Moving Average (SMA), a level that once provided solid support, signaling a potential shift in the market sentiment towards the yen.
Moreover, the combination of a strengthening yen and declining energy costs might reduce the likelihood of any imminent FX intervention from Japan.
Despite the Bank of Japan's (BoJ) recent openness to higher bond yields, the yen hasn't managed to find a firm footing for a sustained rally. The BoJ’s new Governor, Ueda, has left the market guessing on the timeline for shifting away from the current dovish stance. However, he's hinted at a possible exit from negative rates, citing contingent factors like inflation trends and wage growth metrics.
Technically, USD/JPY is finding support around the 146.50 zone, with an additional support level near 145.00. Should a retracement occur, the 50-day SMA may act as dynamic resistance. The Relative Strength Index (RSI) has yet to hit the oversold territory, suggesting that the current bearish momentum could sustain without immediate reversal concerns.
Moreover, the combination of a strengthening yen and declining energy costs might reduce the likelihood of any imminent FX intervention from Japan.
Despite the Bank of Japan's (BoJ) recent openness to higher bond yields, the yen hasn't managed to find a firm footing for a sustained rally. The BoJ’s new Governor, Ueda, has left the market guessing on the timeline for shifting away from the current dovish stance. However, he's hinted at a possible exit from negative rates, citing contingent factors like inflation trends and wage growth metrics.
Technically, USD/JPY is finding support around the 146.50 zone, with an additional support level near 145.00. Should a retracement occur, the 50-day SMA may act as dynamic resistance. The Relative Strength Index (RSI) has yet to hit the oversold territory, suggesting that the current bearish momentum could sustain without immediate reversal concerns.
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