USDJPY Price Analysis: Struggle near 2-week lows, bears await break below 145.00

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  • USDJPY remains under pressure near two-week lows amid prevailing dollar selling.
  • The previous day’s break below the 200-period SMA on the 4-hour chart favors the bears.
  • It seems prudent to wait for weakness below 145.00 before positioning for further losses.

The USDJPY struggles to capitalize on its modest intraday rally and attracts fresh selling near the 146.00 level during the European session on Wednesday. The pair is hovering near a two-week low just below 145.50 and remains at the mercy of the dollar’s price dynamics.

Indeed, the dollar index is weakening near its lowest level since September 20, touched on Tuesday, amid speculation that the Federal Reserve will slow the pace of its rate hike cycle. This, coupled with uncertainty over the results of the US mid-term elections, offers support to the safe-haven Japanese yen, and puts some pressure on the USDJPY pair.

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However, the Fed is still expected to raise interest rates by at least 50 basis points in December, which remains supportive of elevated US Treasury yields. The Bank of Japan, meanwhile, remains hell-bent on keeping the 10-year bond yield at 0%. The ensuing widening of the US-Japan rate spread could limit USDJPY’s losses.

From a technical point of view, the previous day’s slide below the 200-period SMA on the 4-hour chart could be seen as a new trigger for the bears. Furthermore, acceptance below the 146.00 level could have already set the stage for a further downside move. That said, the appearance of some buying ahead of the psychological level of 145.00 warrants caution.

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However, the broader setup suggests that the path of least resistance for USDJPY is to the downside. The negative outlook is reinforced by the fact that the technical indicators on the daily chart remain deep in the bearish territory and are still far from being in the oversold zone.

Therefore, any attempt to rally towards the 146.00 level could be seen as a selling opportunity and risks fading quickly. This, in turn, should cap the USDJPY close to the 200-period SMA support breakout point around the 146.60-146.65 area. That said, a sustained move beyond that region could negate the short-term downtrend.

On the other hand, a convincing break of the 145.00 level should pave the way for an extension of the recent pullback from the 32-year high reached in October. The USDJPY pair could then accelerate the decline and test the next relevant support near the 144.45 horizontal zone before finally falling to the 144.00 level.

USDJPY 4 hour chart


USDJPY key levels


last price today 145.4
daily change today -0.23
Today Daily change % -0.16
Daily opening today 145.63
daily SMA20 147.88
daily SMA50 145.25
daily SMA100 140.57
daily SMA200 132.33
Previous daily high 146.94
Previous Daily Low 145.31
Previous Weekly High 148.85
Previous Weekly Low 145.67
Previous Monthly High 151.94
Previous Monthly Low 143.53
Daily Fibonacci of 38.2% 145.93
Daily Fibonacci of 61.8% 146.31
Daily Pivot Point S1 144.98
Daily Pivot Point S2 144.33
Daily Pivot Point S3 143.35
Daily Pivot Point R1 146.61
Daily Pivot Point R2 147.58
Daily Pivot Point R3 148.23

Source: Fx Street

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