USD/JPY: Bias for downside play – OCBC

USD/JPY eased lower, tracking the dip in UST yields last Fri while markets continue to watch BoJ rhetoric. USD/JPY was last at 150.02, OCBC’s FX analyst Frances Cheung and Christopher Wong note.

Bias for pullback play

“Last Friday, Governor Ueda said that the outlook for overseas economies including the US is uncertain and financial markets continue to be unstable. He also said that the FX rate is now more likely to impact prices than in the past.”

“Earlier, FX chief Mimura flagged ‘sudden, one-sided move’ in FX. He also said ‘We’ll keep monitoring the forex market with a high sense of urgency, including any speculative moves.”

“Bullish momentum on daily chart shows signs of fading while RSI shows signs of easing from near overbought conditions. Bias for pullback play. Support seen at 148, 147 (21 DMA). Resistance at 150.70/80 levels (50% fibo retracement of Jul high to Sep low, 100 DMA).”