USD/JPY maintains draw back break heading into last stretch of the week

The important thing catalyst for the dive decrease this week was a extra dovish Fed. That additionally led to an enormous rally in bonds, with 10-year yields nonetheless buying and selling below 4% at 3.95% on the day presently. In flip, that translated to a break decrease in USD/JPY beneath its 200-day transferring common (blue line) and that places sellers within the driver’s seat.

The draw back break is being maintained as we speak, even when worth motion is a bit more flattish general for the greenback heading into European buying and selling.

The gist of it’s that if USD/JPY retains beneath the 200-day transferring common, then sellers are in management and will doubtlessly look in the direction of a push to 140.00 subsequent. The onus is on patrons to try to break again above the important thing technical stage, so as to wrestle again some management.

However after an unnerving rally in bonds over the past six weeks, alongside a extra dovish Fed, it is going to be a tall order for patrons now. The BOJ would be the subsequent key danger occasion for the pair within the week forward. I might anticipate Ueda & co. to keep up the established order and hold alluding to the spring wage negotiations subsequent 12 months earlier than saying a lot of anything although.