Rising wedge lures USDJPY sellers amid hawkish BoJ concerns

11 thg 9, 2023

USDJPY begins the week on a negative note while extending a downside gap during the early hours of Monday. Adding strength to the bearish bias about the Yen pair are the concerns about the Bank of Japan’s (BoJ) exit from the ultra-loose monetary policy easing and a five-week-old rising wedge bearish chart pattern. It should be noted, however, that multiple supports stand tall to test the pair sellers on their way to the theoretical target of the rising wedge confirmation, around 139.20. That said, the stated wedge’s bottom line of around 145.60 acts as an immediate challenge for the bears to retake control. Following that, the 200-SMA and an ascending trend line from mid-July, close to 144.70 and 143.40 in that order, will precede the 140.00 round figure to also check the pair’s downside momentum ahead of highlighting the 139.20 mark.

On the contrary, another rejection from the BoJ policymakers to the hawkish bias and strong US Consumer Price Index (CPI), scheduled for Wednesday, could renew the upside bias about the USDJPY pair. In that case, the tops marked since last Tuesday around 147.90 will provide headwinds to the Yen pair’s recovery. It should be noted that the stated wedge’s top line, around 148.10 by the press time, holds the key to the buyer’s entry. In that case, the north run will aim for the 150.00 psychological magnet ahead of targeting the previous yearly high surrounding 151.95, as well as the 152.00 threshold.

To sum up, USDJPY bulls appear to run out of steam but the bears need validation from 145.60, BoJ officials and the US inflation to retake control.