USD/JPY Waiting for USD news!

The USD/JPY pair recorded an increase near the 150.20 area, recovering some of the previous losses caused by weaker-than-expected US inflation data. However, the US dollar is near its lowest level since September, reflecting expectations that the Federal Reserve has concluded its tightening policy. The BoJ may delay a shift from accommodative monetary policies following the contraction of the Japanese economy. The daily trend is bearish, but the pair shows resilience above the psychological level of 150.00 and an ascending trendline. A downside break could lead to further declines towards 149.20-149.15, while an upside move may encounter resistance at 151.00, 151.20, and 151.90. The situation calls for caution before positioning for further gains or losses.

Comment:

The USD/JPY continues to decline, reaching an eight-week low, with the psychological level of 147.00 shaping up as a key support after the 38.2% Fibonacci retracement. A potential breakout above the 148.00 level could assist the pair in exploring the area near the nine-day Exponential Moving Average (EMA). The US dollar has hit a nearly three-month low, influenced by dovish expectations from the Federal Reserve (Fed), contributing to the decline in the USD/JPY pair.

On the positive side, the key level at 147.50 serves as an immediate barrier, followed by the psychological level at 148.00. A breakout above the latter could provide support for the USD/JPY pair to explore the region around the 149.00 level following the nine-day EMA at 149.62.

The market is at a crucial level where it could reverse its course with a pullback before continuing short. In fact, we are at the level of 147.38, where I have drawn a psychological line originating from the leg of a daily pin bar. This level will be crucial, as a possible close above it could lead to a continued bearish move towards 146. On the other hand, a spike in this zone could signal a recovery, and one might consider entering long with a potential recovery up to 148.30.