USD/JPY down on the day as the post-BOJ consolidation continues

This is year-end trading and not the best time to watch market movements in a weakened liquidity situation. The dollar is slightly weaker today, with USD/JPY leading the downtrend as sellers wait for some four consecutive days of gains. In the bigger picture, the technical issues are showing some consolidation after the BOJ’s unexpected policy adjustment last Tuesday. The daily chart looks to go back to the June 16 low from 131. 9 support, but sellers are currently still sitting comfortably below 135.00 as well as the 200-day moving average (blue line). In the near term, the price trend remains above the confluence of the 100 and 200 hourly moving averages, currently at 133.26-32. But even if the buyers dominate in the short term, any upside gains will be diminished unless they can break above the aforementioned resistance levels. I shared some thoughts on some of the following last week: „But in the bigger picture, what’s next for USD/JPY? I would argue that much of this is driven by the debate over the next pivot point. Added. to that if market prices seem to be in conflict with the opposition of policymakers that they do not want to change their position I mean it is reasonable to expect that policymakers will continue to defend their current very simple policies, but the actions of the day should speak more louder than words And in turn, their reliability will certainly be at stake in 2023. If there is even the slightest sign that the BOJ will turn around and fight inflation, USD/JPY could once again look towards 100 or 110. momentarily.”

Ethan Andrews

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