USD/JPY Continues Slide Amid Hawkish BoJ Comments

2 באוג׳ 2023

During Wednesday's European session, the USD/JPY pair extended its decline to 142.35, erasing gains made from an intraday low. The pair retreated from its highest levels in three weeks, reaching the 78.2% Fibonacci retracement level. The recent hawkish remarks made by Bank of Japan (BoJ) Deputy Governor Shinichi Uchida added downward pressure on the USD/JPY pair, putting an end to its three-day winning streak.

Uchida's comments suggested the possibility of a modification to the central bank's Yield Curve Control (YCC) policy. This speculation weighed heavily on the pair, prompting a reversal in its recent bullish momentum. As a result, the USD/JPY pair faces increased selling pressure, reflecting a bearish sentiment.

Despite the overall bearish outlook for USD/JPY, today's price action may see a retest of a previous resistance area before witnessing a substantial drop. This indicates that the market sentiment remains cautious, with some traders potentially taking profits or testing resistance levels before the potential downtrend resumes.

Traders and investors should remain vigilant during this period of uncertainty, as any further developments in the central bank's policies or economic data releases could lead to increased volatility in the USD/JPY pair. The broader market sentiment and geopolitical factors should also be closely monitored, as they can influence the direction of the Japanese Yen and the US Dollar.



TurnAround Point: 144.50

Our preference

Short positions After Retest 143.40 with targets at 141.50 & 140.50 in extension.