USD/JPY ticks higher on a light trading season and approaches 142.00
- The Greenback is trading at intra-day highs nearing previous support at the 141.90 area.
- The US Dollar Index is resuming its recovery on thin holiday trade.
- Longer-term, the downtrend from mid-November highs remains intact.
The US Dollar is attempting to extend its rebound from Thursday´s lows, yet with the pair still capped below previous support at 141.90, which leaves the 140.00 level on the bear´s focus.
The Yen has been the worst performer of the G7 currencies this year, but it has managed to trim some losses over the last two months, with the US Dollar crushed by hopes of Fed cuts in 2024.
Beyond that, the Bank of Japan is expected to exit its ultra-loose policy next year although the contradictory messages sent by BoJ officials have frustrated investors and are weighing on a firmer Yen recovery.
Trading is expected to be light on the last working day of the year, with, only the Chicago PMI to offer some distraction. Investors will wait for next week with the minutes of the last Fed meeting, US PMIs and, above all, December´s Nonfarm Payrolls to take directional bets on the USD.
The technical picture remains negative yet with bearish momentum losing steam, as shown by the last three week’s falling wedge. This figure has a bias to break lower although support levels at 140.00 and 139.00, the 261% extension of the mid-November decline are likely to challenge bears
On the upside, resistances are at 141.90 and 142.90.
Technical levels to watch
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
