USDJPY gains traction for the third day in a row, but lacks follow-through purchasing.
On Wednesday, the USDJPY pair trades with a bullish bias for the third day in a row. And is now trading at the mid-150.00s, slightly below the weekly high set the day before.
The Japanese Yen (JPY) has continued to underperform in the aftermath of the Bank of Japan’s (BoJ) more dovish posture. Which is seen as a tailwind for the USDJPY pair. The US Dollar (USD), on the other hand halts its modest recovery from a multi week low reached on Monday. And limits the major’s upside. Furthermore, traders are staying put ahead of Federal Reserve (Fed) Chair Jerome Powell’s address later in the early North American session.
USDJPY Technical Outlook
Technically, the USDJPY pair exhibited some resilience earlier this week below the 200 period Simple Moving Average (SMA) on the 4-hour chart. The subsequent rise. As well as the different policy outlooks of the BoJ and the Fed, favor bullish traders. Furthermore, oscillators on 4 hourly charts remain bullish. Indicating that the path of least resistance for spot prices is to the upward. As a result, some follow-through strength in the direction of recovering the 151.00 mark appears to be a distinct possibility.
The momentum could shift. get extended further in the direction of retesting the YTD top, around the 151.70 area, en route to the 152.00 neighborhood, or a multi-decade high reached in October 2022.
On the other hand, the psychological level of 150.00. Which now corresponds with the 100-period SMA on the 4 hour chart, appears to be protecting the immediate downside. The mentioned handle might also serve as a crucial important point for short-term traders, if broken decisively. Dragging the USDJPY pair back towards the 200-period SMA on the 4-hour chart, which is now positioned near 149.55.
Some follow through selling will be viewed. As a new trigger for pessimistic traders, paving the way for a significant depreciation move.
