USD/JPY Price Analysis: Breaks nearby support to slip beneath 140.00 as Yen traders await US GDP, BoJ
- USD/JPY renews weekly low after breaking fortnight-old rising support line.
- Bearish MACD signals, U-turn from 200-SMA adds strength to downside bias.
- Talks of BoJ policy tweak, downbeat US Dollar direct Yen pair towards 137.90 support confluence.
USD/JPY drops for the fourth consecutive day as it breaks a two-week-old rising support line, now immediate resistance, to refresh the weekly low near 139.40, close to 139.70 by the press time of early Thursday morning in Europe.
In doing so, the Yen pair also justifies the market’s chatters that the Bank of Japan (BoJ) is overdue for a policy tweak. Also exerting downside pressure on the Yen price could be the broad-based US Dollar weakness despite the Federal Reserve’s (Fed) hawkish rate hike amid fears of a sooner end to the tightening spell. That said, the DXY prints a three-day losing streak, down 0.24% intraday near 100.78 by the press time.
Amid these plays, the USD/JPY pair is likely to extend the latest fall towards the 50% Fibonacci retracement of its May-June upside, near 139.30.
However, a convergence of an ascending support line from early May and the 61.8% Fibonacci retracement, near 137.90, appears a tough nut to crack for the Yen pair sellers.
Alternatively, a corrective bounce needs validation from the previous support line stretched from mid-July, close to 140.40, as well as a downward-sloping resistance line from early June, close to 141.15 by the press time.
Even so, the 200-SMA level of around 141.65 at the latest will act as the final defense of the USD/JPY bears.
USD/JPY: Four-hour chart
Trend: Further downside expected