The USD/JPY was able to build a significant amount of price velocity lower upon the U.S Federal Reserve’s FOMC Statement on Wednesday, which was interpreted by financial institutions as confirmation the Fed has now changed its monetary policy. Gone were the warnings about interest rate hikes to come, they were replaced by the potential of interest rate cuts to be seen in the spring of 2024.
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The USD/JPY is trading near the 141.800 level as of this writing with fast conditions still flourishing in the currency pair. The USD/JPY is now testing values it last saw in late July of this year. The USD/JPY had been showing signs of selling the past few weeks as financial institutions produced downside price action on occasion. The USD/JPY was near the 145.300 area when the U.S Fed released its FOMC Statement last night, the momentum lower was fast and the 140.990 ratio was tested this morning.
Conditions in the USD/JPY Choppy and Risk Management is Important
The ability of the USD/JPY to burst through the low of 143.000 and sustain values below is important technically. If the USD/JPY can maintain its value below this mark it will likely be seen as an indication further sustained momentum downwards could develop in the USD/JPY. The new important level being tested as of this writing is 142.000.
However, traders should remember the USD/JPY has moved with a huge amount of price velocity in the past twelve hours, and this may not be repeated in the near-term. Traders should not be overly ambitious regarding their short-term outlooks. Bearish traders may be proven correct who continue to look for the USD/JPY trend to remain lower, but using take profit orders that are realistic can allow speculators to avoid sudden reversals higher which can develop.
Support Levels for Consideration in the USD/JPY
- Moves below the 142.000 should be watched in the short-term, if the 142.000 level proves durable as resistance this could spark the notion that financial institutions may have their eyes on lower depths.
- Having produced a significant lower move in the USD/JPY confirms that behavioral sentiment has been leaning towards bearish perspectives. The speed of the declines brings July 2023 values into consideration for USD/JPY traders.
- The 141.500 to 141.000 values will now be watched intently by traders with bearish sentiment over the near-term.
USD/JPY Short Term Outlook:
Current Resistance: 142.050
Current Support: 141.780
High Target: 142.710
Low Target: 141.075
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