With the Christmas holidays and investor reluctance, and amid almost non-existent liquidity, the price of the USD/JPY could remain stable around the level of 142.45. obviously, it is recovering from the losses of Friday's session, which reached the support level of 141.85. currently, the USD/JPY pair is still affected by the shift in the direction of central bank policies, with the Bank of Japan being the closest to tightening its policy after a long wait, and the US Federal Reserve. On the other hand, hinted in its last meeting that it is ready to cut US interest rates in 2024.
On the economic side, annual GDP of the United States of America for the third quarter exceeded expectations of 5.2% with a change of 4.9%. also, personal consumption expenditure prices for this period also fell below 2.8%, with a change of 2.6%, while basic personal consumption expenditures fell below 2.3%, with a change of 2%. On another level. Moreover, the Philadelphia Fed's December manufacturing survey missed the expected reading of -3 with a reading of -10.5. finally, US initial jobless claims for the week ending December 16 exceeded expectations of 215,000 with a tally of 205,000.
In Japan, the Bank of Japan decided to keep the key interest rate unchanged at -0.1%, in line with expectations. Also, Japanese exports for November were less than the expected change of 1.5% with a change of -0.2%, while imports were less than -8.6% with a change of -11.9%. furthermore. The merchandise trade balance for November exceeded the total expected balance of -962.4 billion Japanese yen, with a balance of -776.9 billion Japanese yen.
USD/JPY Technical analysis and Expectations Today:
The USD/JPY currency pair is currently declining, trading at levels slightly below the 100-hour moving average. As a result, it appears that the USD/JPY is on the verge of entering overbought levels for the 14-hour Relative Strength Index (RSI). In the short term, based on the hourly chart performance, USD/JPY seems to be trading within a descending channel. Also, the 14-hour RSI suggests a bearish bias as it approaches overbought conditions. Therefore, bearish traders will be looking to ride the current downward wave towards 141.80 or lower to support at 141.45. On the other hand, bullish traders will be looking to seize profits around 142.53 or higher at resistance 142.92.
Looking at the long term and based on the daily chart performance, USD/JPY also seems to be trading within a descending channel. However, the 14-day RSI recently bounced to avoid slipping into overbought levels. furthermore, bullish traders will target extended rebounds around 144.47 or higher at resistance 146.59. Finally, bears will target long-term profits around 139.78 or lower at support 137.43.
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