Japanese yen struggling to find a clear intraday direction against USD.
The Japanese Yen (JPY) regains early lost territory versus the US Dollar (USD). But there is no follow-through purchasing heading into Friday’s European session. Meanwhile, the USDJPY pair oscillates in a range around the 142.00 round figure. Due to mixed fundamental indications, necessitating considerable caution before positioning for a firm intraday trend. Increasing anticipation of a forthcoming transition The Bank of Japan’s (BoJ) monetary stance early next year may turn out to be a crucial factor supporting the JPY. This, to a significant extent, obscures dismal domestic data, which indicate. That Japan’s industry activity fell for the sixth consecutive month in December.
Fed rate cut bets drive the USD to a four-month low and act as a drag on USDJPY
Meanwhile, the bullish US macro data released on Thursday. Combined with last week’s stronger than expected US jobs report. Prompted traders to reconsider the possibility of the Federal Reserve (Fed) cutting interest rates in March. This is reinforced by a modest increase in US Treasury bond yields. Which, together with the existing risk-on atmosphere, stops the safe-haven JPY from strengthening significantly. However, the USDJPY pair’s potential remains limited. the aftermath of continued USD selling bias. Traders may also hesitate from placing aggressive bets in the run-up to the key Bank of Japan policy meeting next week.
Meanwhile, the release of flash PMI prints from the Eurozone, the United Kingdom, and the United States on Friday may provide new insight into the global economy’s health. This, in turn, would influence market risk sentiment and demand for the traditional safe-haven JPY, providing some impetus to the USDJPY pair. Nonetheless, spot prices are on course to conclude the week in the red for the sixth time in a row.
Japenese yen Technical Outlook
USDJPY oscillates about 142.00, indicating that we are not yet out of the woods.
The Relative Strength Index is a technical indicator. (RSI) on the daily chart remains in oversold territory, prompting some short-covering on the final day of the week.
Nonetheless, the overnight sustained break and acceptance below the 200-day SMA favors bearish traders. As a result, any subsequent rise above the stated support breakpoint, now turned resistance, now in the mid-142.00s, could be viewed as a selling opportunity near the 142.75-142.80 region. As a result, the USDJPY pair should be capped near the 143.00 round figure. However, prolonged momentum over the latter may allow spot prices to reclaim the 144.00 level.
Japenese yen On the other hand, the round figure 142.00 now appears to defend the immediate downside ahead of the 141.40-141.35 range.
Some follow-up selling could expose the multi-month contract. Below the 140.95 psychological level, the USDJPY pair is likely to accelerate its decline towards the 140.00 psychological level.
