- The Greenback fails at 143.00 as the US Dollar index dives to new multi-month lows.
- A dovish Boj is weighing on the Yen.
- Longer-term, the downtrend from mid-November highs remains intact.
The US Dollar is trading water against the Japanese Yen, with price action failing to find any relevant acceptance above 143.00 as the US Dollar Index dives to fresh five-month lows.
The Yen suffers on the back of BoJ dovishness
The Greenback had been taking advantage of a broad-based JPY weakness, after the release of a split BoJ Summary of Opinions and the dovish comments by Governor Ueda.
The BoJ disappointed investors in December by maintaining its ultra-loose policy. Earlier today, BoJ Chair Ueda maintained that any policy shift will depend on the progress of the inflation target, which has failed to improve investors’ confidence on the Japanese currency.
Beyond that, the positive risk sentiment is weighing on both currencies against their main rivals, which might lead to sideways trading.
Technical indicators are mixed with the 4h RSI flattening near the 50 level, which suggests a lack of clear direction. From a longer perspective, the downtrend from mid-November highs remains intact.
On the upside, the falling trendline from the mentioned November highs, now at 143.55, and the December 19 high, at 144.90 are the nearest targets. Supports lie at 141.95.00 and 141.00.
Technical levels to watch
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