USD/JPY: Dollar Turns Lower at Key Technical Resistance

The USD/JPY pair reversed course just as it hit a long-term indicator (it’s the 200-day SMA.)

  • USD/JPY staged a U-turn early on Thursday as currency traders rotated out of US dollars following the Powell-led pump on Tuesday and Wednesday. In that context, the USD/JPY powered up to a fresh high of ¥137.91 before coming down by 1% today to ¥136.60.
  • For the technically-curious minds, the pair downshifted just as it hit the 200-day SMA – a long-term indicator that signals whether the asset is in a bear market or a bull market. By the looks of it, market participants think it’s not yet the time for the USD/JPY to exit the bear market.
  • Still, the Japanese yen has been losing momentum against a stronger dollar, with the USD/JPY gaining a hefty 7.5% from its January low of ¥127.20 to current market prices. Notable reports to keep an eye out for: Japan’s central bank unveils its policy statement today and on Friday we have the US jobs number.

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Mar 032023

USD/JPY Pivots at Key Inflection Point

Trading just got technical as a major indicator has proven its validity (at least for the time being.)

  • USD/JPY reversed course after hitting a level that’s just under the 200-day simple moving average. The indicator is famous for its perceived ability to pick tops and bottoms. The story goes – if trend is under the line, then it’s bearish; if trend is above the line, then it’s bullish.
  • Effective? Well, if it works some of the time, but not all the time can you rely on it? Regardless, the USD/JPY reached that quintessence of market predictions at ¥137.10 and then bounced in the opposite direction. A feast for the technical gurus, right?
  • What’s next? A quiet day is about to unfold, at least on the economic news front. There’s the US ISM non-manufacturing PMI being published today, but it’s no real market mover. Next week promises to be riveting with the jobs report scheduled for release on Friday.

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