USDJPY struggles to maintain month-old bullish trend on BoJ’s cautious pause
USDJPY snapped a three-day winning streak even as the Bank of Japan (BoJ) held benchmark interest rates unchanged, as widely expected, after its two-day monetary policy meeting early Thursday. In doing so, the Yen pair also challenged a five-week-old bullish trend channel.
Bulls lack acceptance but bears have a bumpy road ahead…
Apart from the BoJ’s hawkish halt, sluggish MACD and RSI conditions, along with the USDJPY pair’s inability to cross a month-old rising resistance line and 61.8% Fibonacci retracement of July-September downside, suggest a weakening of bullish bias. A slew of key supports, however, might challenge the sellers before taking control.
Key technical levels to watch
The aforementioned upward-sloping trend channel’s bottom line, close to 152.80, gains the immediate attention of the sellers ahead of the 50-bar Exponential Moving Average (EMA), around 152.20 at the latest. Following that, the USDJPY sellers can aim for the 150.00 threshold and the 200-EMA support of 149.00. In a case where the quote remains bearish past 149.00, the 38.2% Fibonacci ratio and September’s peak, respectively near 148.10 and 147.20, will act as the final defense of the buyers.
On the contrary, USDJPY needs a clear upside break of the 61.8% Fibonacci retracement level of 153.45, also known as the golden ratio, to convince buyers. Even so, a month-long ascending trend line and a horizontal hurdle established since mid-July, close to 154.80 and 155.30-40, will challenge the Yen pair’s further advances. If the prices remain firmer past 155.40, the odds of witnessing a rally toward the aforementioned bullish channel’s top line surrounding 157.70 can’t be ruled out.
Focus on US data
As the BoJ’s cautious stance weighs on USDJPY buyers, traders will watch upcoming US inflation and employment data for further direction.
