Nov 02 2022
VOT Research Desk
On Wednesday, the USD/JPY pair encounters new supply and keeps losing momentum during the early North American session.
The emergence of new selling of the US dollar drives spot prices below the 147.00 round-figure threshold in the last hour, marking the second day in a row of a downward trend.Looking at the bigger picture, the USD/JPY pair has so far been able to hold onto the 4-hour chart’s 200-period SMA.
The aforementioned support is currently located close to the 146.15-146.10 range and should serve as a turning point. The recent drop from the 152.00 neighbourhood, or the highest level since August 1990 hit in October, will resume if there is a strong break below. The decline in spot prices might then quicken as they approach the psychological level of 145.00, which served as last week’s swing low.
The USD/JPY pair will become susceptible if there is a convincing breach below the latter and is considered as a new trigger for bearish traders.
The subsequent decline may open the door for a slide towards the intermediate support at 144.50 before the pair eventually descends below the round number of 144.00.
On the other hand, any attempt at a recovery may now run into resistance close to the 147.60-147.65 area, above which the USD/JPY pair may look to retake the 148.00 level.
Any near-term bearish bias will be offset by some follow-through purchasing beyond the 148.25-148.30 barrier, which will raise spot prices toward the 148.80-148.85 supply zone. The 149.00 round-figure threshold follows this one closely.
The USD/JPY pair will rise again towards the psychological 150.00 level and the near-term bias will turn back in favor of bullish traders if sustained strength continues beyond the latter.
In order to reach the round number of 151.00, the upward trajectory may be extended toward the next significant barrier near the 150.40-150.50 area.
