USD/JPY daily chart
This is, as I highlighted earlier, the first stop on the way down. The Bank of Japan is starting to get the ball rolling on the Japanese Yen and we are now seeing things start to move.
A break below the 100-day moving average (red line) of 147.73 will prompt buyers to abandon recent upside bias. This means that the next focus will be on the minor support from the 38.2 Fib retracement level at 146.82. However, as mentioned above, what is most notable is the February 1st low near 146.00 and the 200-day moving average (blue line), which is currently sitting at 146.11.
The yen continues to gain momentum in the run-up to the Bank of Japan’s policy meeting at the end of this month, and this will be an important level to watch going forward. Considering the recent technical break in US Treasury yields, it is quite persuasive to continue to argue for a further decline in USD/JPY at this point.
That said, it’s still possible that future U.S. statistical releases could change the equation. Tomorrow, the US non-farm payroll numbers will be announced. Next week, US CPI data, PPI data, and retail sales will be released. Next week’s agenda will also feature auctions for 10-year and 30-year bonds.
