USD/JPY price drops below mid-Fibonacci level as sell-off intensifies
The pair now eyes support at 153.200 level
USD/JPY price is under mounting bearish pressure, extending its decline from a recent 16-week high. The pair slipped below the critical 153.90 support level, which aligns with the 0.786 Fibonacci retracement of its upswing from November 8. Adding to the bearish outlook, a 50 and 100 EMA intraday crossover has further amplified the downward momentum.
The sell-off coincides with heightened uncertainty surrounding the Bank of Japan's (BoJ) monetary policy stance. Governor Kazuo Ueda recently emphasized that policy decisions would hinge on economic activity and inflation trends, offering no clarity on a potential rate adjustment in December. Markets, hoping for firmer guidance, were instead left in limbo, leaving the Yen vulnerable. In response to this, Japan’s Finance Minister Katsunobu Kato reiterated the government's readiness to act against excessive currency fluctuations, signaling potential intervention if volatility spikes.
Upcoming CPI data and U.S. policy to determine USD/JPY outlook
Traders are now focusing on upcoming wage negotiations and inflation data for further policy signals. Japan’s National Consumer Price Index (CPI) data, set for release on Friday, is expected to be a key driver for the BoJ’s near-term outlook. Meanwhile, U.S. monetary policies continue to support the dollar, with Federal Reserve officials, including Chair Jerome Powell, maintaining a restrained stance on rate cuts, which has bolstered the greenback's strength.
Despite an initial slide, USD/JPY bulls have pushed the pair back to the 154.00 mark. However, this recovery appears fragile, with technical resistance and broader bearish sentiment capping further gains.
The pair now eyes support at 153.200 level near the 0.786 Fibonacci retracement level. However, technical indicators, like the bearish RSI divergence, suggest further downside pressure could emerge if momentum fades. Therefore, a break below the near-term support could pave the way toward 152.00.
Governor Kazuo Ueda left the door open for a potential rate hike but avoided confirming the timing. Yen price weakens as BOJ Governor Ueda keeps markets guessing.
