Early Friday, USDJPY reverses the previous day’s run-up to the highest level in a fortnight as the Bank of Japan (BoJ) leaves monetary policy unchanged, as expected.
USDJPY recently reversed from a six-week resistance level, and the RSI is pulling back while the MACD shows signs of a bearish crossover, which keeps sellers optimistic. Additionally, the price remains below the 200-Exponential Moving Average, making it harder for Yen buyers. However, a bullish falling wedge pattern that has formed since early August could encourage buyers.
The USDJPY pair's drop from a key resistance level, along with weak indicators, suggests sellers will target below 142.00. Key levels to watch are the psychological mark at 140.00 and the monthly low around 139.55. If buyers can’t hold above the falling wedge's bottom near 139.30, the price could drop to the mid-2023 low around 137.20.
On the flip side, the 1.5-month-old horizontal resistance area near 143.70-144.00 appears a tough nut to crack for the USDJPY bulls. Following that, the quote’s quick jump toward the stated bullish wedge’s top line around 145.00 can’t be ruled out. If the price stays above 145.00, it could aim for 156.00, but breaking the 200-EMA at 145.30 is essential for that rally.
Given the monetary policy divergence between the US Federal Reserve (Fed) and the Bank of Japan (BoJ), as well as the quote’s sustained trading below the key resistances, the USDJPY sellers are likely to have some more days to cheer.
