USD/JPY outlook: Falls to seven-week low as strong Japanese wage growth boosts bets for BoJ rate hike
|USD/JPY
USDJPY fell nearly 0.9% in Asian – early European trading on Wednesday as the dollar remains at the back foot for the third straight day, while yen received fresh boost from stronger than expected rise of earnings in Japan that adds to scenario of more BoJ rate hikes.
Today’s drop below temporary base / 50% retracement of 148.64/158.87 (153.76) and base of thickening daily cloud (153.36) generated fresh signals of continuation of short-term downtrend from 158.87 (2025 peak, posted on Jan 10).
Bears cracked 200DMA (152.77) which marks the upper boundary of 152.77/41 support zone, consisting of 200DMA / Fibo 61.8% / 100DMA.
Firm break here is needed to validate reversal signal and open way for deeper correction of Sep/Jan 139.57/158.87 rally and expose targets at 151.50 (Fibo 38.2% of 139.57/158.87) and 151.00 (round figure).
Caution on potential headwinds bears may face at this zone, with limited upticks to offer better selling opportunities as daily studies are in predominantly bearish configuration.
Releases of US ADP private sector payrolls report, Dec trade balance and January Services PMI will be closely watched today.
Res: 153.36; 153.76; 154.49; 154.70.
Sup: 152.55; 152.36; 152.00; 151.50.
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