USDJPY Reversal Deepens
USDJPY has fallen back under 140 for the first time since September as the correction lower in USD threatens to spill over into a proper reversal. Yesterday’s US CPI release has seen market pricing for the December FOMC swinging in favour of a smaller .5% hike, fuelling an unwinding of USD longs. Added to this, attempts by the BOJ to stabilise the Yen in recent weeks have helped undeprin the currency with traders now anticipating further action should any fresh weakness materialise. With these two themes providing the backdrop, sentiment has shifted now and USDJPY looks prone to further weakness in the near-future.
UoM Sentiment Data Up Next
Looking ahead today, the latest UoM consumer sentiment data looks set to further weigh on the Dollar. The market is forecasting a drop to 59.5 from 59.9 prior which should keep USD pressured into next week. Additionally, if any surprise weakness is seen, the USD sell off will likely accelerate near-term ahead of next week’s retail sales data.
The reversal in USDJPY from 151.81 has seen the market breaking below key support at the 145.00 level and below the rising channel from YTD lows. With both MACD and RSI having turned bearish here, the focus is on a continued push lower while price remains below the 145.00 level. Currently, support at 140.34 is holding, so today’s close will be key. Below here, the next supports to monitor are 136.88 and 131.36.