The USDJPY Continued Its Decline During The Asian Trading Session.
This week’s key point to note has been the dollar’s rejection close to 145.00. The sharp retreat in USDJPY has seen other major currencies take advantage of the softer greenback towards the end of the week. The added jawboning by Japanese officials earlier in the day here is also helping, with Kuroda outlining that when the pair moves by 200 to 300 pips, then it can be considered a ‘rapid’ move. That said, it’s likely that he has no complaints about the 200 pips retracement today.
This week’s key point to note has been the dollar’s rejection close to 145.00. The sharp retreat in USDJPY has seen other major currencies take advantage of the softer greenback towards the end of the week. The added jawboning by Japanese officials earlier in the day here is also helping, with Kuroda outlining that when the pair moves by 200 to 300 pips, then it can be considered a ‘rapid’ move. That said, it’s likely that he has no complaints about the 200 pips retracement today.
Overall, I believe that Japanese officials are okay with a falling currency. They realize that they can’t do much about it right now because the BOJ is still keeping monetary policy easy. But they want to prevent any sudden depreciation, and with USDJPY rising from 140.50 to 145.00 in just a few days, they decided to take action before traders got too carried away.
The chart above shows that prices have dropped below the 100-hour moving average (red line) at 142.81 and are now caught between that and the 200-hour moving average (blue line) at 141.10. This makes the near-term bias more neutral and outlines the technical levels in play in the short-term.
There is further support seen at around the 140.00 handle, while key resistance remains at the 145.00 handle in the big picture.
However, for now, the price retreat is still more measured and within the levels mentioned above, as it moves in tandem with the dollar decline seen elsewhere earlier on.
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