USDJPY Sees Rebound After Previous Decline, Market Anticipates Japan's Financial Policy Outcome

After experiencing a series of declines over five trading days, totaling a 2.5% decrease, the USDJPY currency pair is showing signs of a rebound. This recent movement is pivotal in identifying possible medium-term trends as we examine the pair on a daily timeframe. Throughout this period, the US dollar has shown signs of weakening, which is reflected in the pair's depreciation from the highs seen last month.

Technical Analysis Insights

The fall in the USDJPY pair could also be interpreted as a technical correction. The retracement from the lows of December at 140.3 back to the peaks seen last month at 150.8 has reached the 61.8% Fibonacci retracement level, highlighting a pattern that is well recognized by traders who use technical analysis.

In addition to this, the USDJPY pair has moved closer to the 200-day moving average, which has historically played a key role as a support level since mid-2023.

Short-term Expectations and Key Levels

The Japanese yen is expected to undergo a consolidation period, potentially lasting a week, as the market anticipates the Bank of Japan's decision the following Tuesday. This time interval is crucial for market participants to amass sufficient liquidity for a decisive directional move.

If USDJPY fails to uphold above 146, this could signify a triumph for the bears, triggering expectations of further consolidation at lower levels, around 140-141. Conversely, a breakthrough above 148, which aligns with the 50-day moving average, could signal early stages of growth resumption, with an initial objective of reaching 150.8.

USDJPY, Market, Trends