- USD/JPY stays defensive after two-day uptrend, seesaws around the short-term key hurdle.
- BOJ’s bond-buying announcement caps upside moves ahead of Fed.
- Convergence of 50-SMA, two-week-old ascending trend line restricts immediate downside.
- Double tops around 145.00 appear a tough nut to crack for the bulls.
USD/JPY treads water around 143.75 as bulls take a breather after a two-day uptrend to Wednesday’s Asian session.
The yen pair’s latest hesitance to rise further could be linked to the Bank of Japan’s (BOJ) readiness for buying Japanese Government Bonds (JGBs). “BOJ offers to buy JGBs at fixed-rate with unlimited amount (Residual maturity of 5YR to 10YR) outright from September 22,” said Reuters.
Technically, the pair’s ability to stay firmer past the short-term key support confluence including the 50-SMA and a fortnight-long rising trend line, around 143.20-15, keeps the USD/JPY buyers hopeful. Also favoring the bulls is the firmer RSI (14), not overbought.
It should be noted, however, that the double tops marked near 145.00 challenge the pair’s immediate upside before directing buyers towards the 61.8% Fibonacci Expansion (FE) of the August 30 to September 09 moves, close to 145.85.
Alternatively, a downside break of 143.15 is an open invitation to the USD/JPY bears as the 100-SMA and the September 09 swing low, respectively around 142.10 and 141.50, will challenge the quote’s further downside.
Following that, the 50% Fibonacci retracement level of August 23 to September 07 upside, near 140.40, will precede the 140.00 threshold to limit the USD/JPY downside.
USD/JPY: Four-hour chart
Trend: Limited upside expected
