USDJPY bulls prod 200-EMA resistance after BoJ status quo
USDJPY prints a three-day uptrend while extending the previous week’s recovery from the lowest level since late July after the Bank of Japan (BoJ) defends the current monetary policy. In doing so, the Japanese central bank rules out concerns surrounding its gradual exit from the ultra-easy monetary policy amid a recent increase in inflation. With this, the Yen pair pokes the 200-EMA hurdle, extending recovery from a five-month-old horizontal support. The rebound also justifies the RSI (14) line’s U-turn from the oversold territory, which in turn suggests the quote’s further run-up beyond the key EMA surrounding 143.80. However, the bearish MACD signals and a downward-sloping resistance line from mid-November, close to 145.30 by the press time, will challenge further advances. In a case where the buyers keep reins past 145.30, the odds of witnessing a run-up towards the monthly high near 148.35 and then toward the 150.00 psychological magnet can’t be ruled out.
Meanwhile, growing chatters about the US Federal Reserve’s (Fed) rate cuts in early 2024 could join the downbeat yields to weigh on the USDJPY pair, which in turn highlights the aforementioned horizontal support region of around 141.50-142.00. Should the Yen pair sellers manage to break the 141.50 support, it can quickly drop to the 140.00 psychological magnet before highlighting July’s low of 137.23 as the key support. Following that, the pair’s bearish trajectory towards the yearly bottom of 127.20 appears a favorite for the bears.
Overall, USDJPY regains upside momentum but the room towards the north appears limited.
