December 04, 2024 at 08:36AM
After running into a test of its 100-day moving average (red line) on Monday, the pair did so again in trading yesterday. That owed to a bid in the Japanese yen after the whole martial law fiasco in South Korea involving president Yoon. And as the drama died down, USD/JPY retraced back up with buyers keeping a bounce off the key technical level above.
That is leading to a stronger bounce today with the pair now up 0.5% to around 150.39 on the day. What is different about the latest bounce as opposed to the Monday one though is that the near-term bias is potentially shifting in the pair. As buyers hold their ground as seen on the daily chart, the hourly chart is also reflecting more conviction on their end:
The nudge higher is seeing buyers poke through the 100-hour moving average (red line) and switching the near-term bias to being more neutral again. That as price action is above that but below the 200-hour moving average (blue line).
As things stand, there’s still a lot for USD/JPY to figure out in the coming weeks. The Fed and BOJ are the two big elephants in the room that needs to be focused upon and addressed. The former looks certainly to go with a 25 bps rate cut but as for the latter, a rate hike remains very much up in the air at this stage.
This article was written by Justin Low at www.forexlive.com.
