USD/JPY: Will 140 give way? – OCBC

USD/JPY continued to trade downwards. Pair was last seen at 140.22, OCBC’s FX strategists Frances Cheung and Christopher Wong note.  

Bias to the downside

“USD/JPY continued to trade with a heavy bias driven by decline in the USD leg as expectations for larger Fed cut returned to the table while earlier in the week, hawkish remarks made by BoJ officials lent strength to JPY.”

“Daily momentum is not showing a clear bias for now but RSI fell. Death cross earlier formed is getting more ‘entrenched’. Bias to the downside. Support at 140.30, 138 levels. Resistance at 143.50, 144.40 (21 DMA), 146.40 (23.6% fibo retracement of Jul high to Aug low).”

“BoJ MPC (Fri) – our house view does not expect a move but watch out for potential hawkish remarks from Governor Ueda as that may boost JPY.”