Usdjpy Shows Weakness

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Usdjpy Shows Weakness

Usd/Jpy Shows Weakness Around 149.00 On Risk Aversion

USD/JPY is struggling near 149.00 and is trading with little losses on Wednesday. It seems that the risk-off tone is helping the Japanese Yen while the weakness in the US Dollar is also pushing the USD/JPY lower.

Recently, the comments from the BoJ's Adachi were also very meaningful, and it seems that the traders are now trying to digest it.

Usd/Jpy Still In Long Term Uptrend

On the D1 chart of the USD/JPY, it appears that the uptrend is still intact, but the bias is now neutral to bullish. Technical indicators show that USD bulls are still in charge, but the pair is inside the Ichimoku Cloud.

That's a sign that the USD/JPY is now in the consolidation phase, and its upside is capped. At the same time, the RSI appears to be struggling to clear its previous weeks. Once again, that's a sign that the USD/JPY has overextended its uptrend.

Right now, USD/JPY is above the 150.00 handle and is now eyeing the next target at 100 SMA located at 150.98. Beyond that, the 200 is also a formidable resistance located near 151.27.

If USD/JPY declines under 149.00, the first support will be at 147.95, where the tenkan-sen is present. Once this is crossed, the next support will be at 146.48, where the Senkou Span is located.

The bottom line is that USD/JPY is showing signs of exhaustion, and JPY has started to show some muscle. At the same time, any follow-through buying in the pair appears to be hacking.

Once the uncertainty over the BOJ rate hike plan is gone, a full-blown bearish trend will appear in USD/JPY. On the other hand, the Fed is also not expected to go with another aggressive rate cut.

Instead, smaller rate cuts worth 25 bps will be the new norm for the US Federal Reserve. Hence, any selling in the USD/JPY could be viewed by the traders as a buying opportunity.

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