USD/JPY Nears 148.00 Amid Potential Intervention and Key Economic Data
The USD/JPY currency pair has seen a renewed downtrend, inching towards the 148.00 level during Thursday’s Asian trading hours. This decline marks a continuation of the recent bearish trend, despite a slight price recovery in recent hours, maintaining above the month’s earlier low set on September 14.
One plausible explanation for the pair’s decline is the Japanese financial custom “Gotobi”, wherein particular payments are made on specific days ending in “5” or “0”. Moreover, whispers of potential intervention by Japanese authorities, particularly as the Japanese Yen (JPY) previously slipped beyond the 150.00 threshold against the US Dollar, may be inducing some profit-taking activities.
Concurrently, the US Dollar (USD) is retracing from its nearly 11-month peak attained earlier this week. Influencing factors include yesterday’s lackluster US ADP report and a tempered US services sector performance, suggesting the Federal Reserve (Fed) may reconsider aggressive interest rate hikes. This sentiment led to the softening of US Treasury bond yields, further pressuring the USD.
However, remarks from several Fed representatives advocate for continued policy adjustments to realign inflation to the 2% benchmark. The broader market sentiment is bullish on at least one more rate hike this year, solidifying the view of sustained higher rates. This backdrop could bolster US bond yields and the USD, making it prudent for traders to be circumspect about taking strong bearish stances on the USD/JPY .
Market participants are likely to remain vigilant, anticipating the pivotal US Non-Farm Payrolls (NFP) report due Friday. In the interim, today’s Weekly Initial Jobless Claims from the US and US bond yield movements could offer immediate trading cues for the USD/JPY trajectory.
USD/JPY Technical Outlook
The USD/JPY pair has initiated the trading day with a pronounced downturn, breaching the 148.70 mark and consolidating beneath it. This shift repositions the currency pair under a renewed bearish trajectory, aiming for the 147.30 threshold as an initial target. It’s crucial to note that surpassing this level might amplify the bearish momentum towards the 145.55 zone in the foreseeable future.
Given this context, today’s outlook for the pair is decidedly bearish, reinforced by its position below the 50-day Exponential Moving Average (EMA50). However, traders should be alert: a breach above 149.05 could reverse this trend, prompting the price to rebound and re-enter a primary bullish phase.
For today, the anticipated trading bracket is delineated between the support at 147.50 and the resistance at 149.10.
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