The Japanese Yen (JPY) attracted some intraday sellers and snapped a two-day winning streak against its American rival after Bank of Japan (BOJ) Governor Kazuo Ueda said on Friday that underlying inflation remains slightly below 2%. Additionally, a modest uptick in the US Treasury bond yields and a generally positive risk tone undermined the safe-haven JPY. This, in turn, helped the USD/JPY pair retrace nearly 100 pips from Asian session lows.
Meanwhile, data released earlier today showed that consumer prices in Tokyo – the capital of Japan – rose in January. This kept alive hopes for further BOJ policy tightening and should keep a lid on any meaningful JPY depreciation. Further, uncertainty over US President Donald Trump's policies held the US Dollar (USD) investors from placing any aggressive bets and might keep a lid on the USD/JPY pair ahead of the US Personal Consumption Expenditures (PCE) Price Index data.
Against the backdrop of the recent slide below a short-term ascending trend-channel, some follow-through selling below the monthly swing lows, around the 153.70 region touched on Monday, will be seen as a key trigger for bearish traders. Moreover, oscillators on the daily chart have been gaining negative traction and are still far from being in the oversold zone. Hence, a subsequent fall could drag the USD/JPY pair towards the 153.00 round-figure mark en-route the 152.40 and 152.00 handle. The latter coincides with 100-day Simple Moving Average (SMA) and might offer decent support to the spot prices.
On the flip side, any recovery attempt beyond mid-154.00s now seems to confront a stiff barrier near the 155.00 psychological mark. However, a sustained strength could trigger an intraday short-covering move towards the 155.40-45 region en-route the 156.00 round-figure mark and weekly tops, around the 156.25 region. The next relevant hurdle is pegged near the 156.75 region, which if broken decisively could shift the near-term bias in favour of bullish traders and pave the way for additional gains. (AL)
Source: FXstreet
