USD/JPY Maintains Slight Bullish Bias Amid Potential Reversal Signs

USD/JPY held a slight bullish bias on Friday, hinting at a potential reversal after Thursday’s larger bearish movement stalled. This led to the formation of a long-tailed Doji candlestick, bouncing from a new multi-week low and creating a bear-trap below the 152.39 Fibonacci support on the daily chart.

The downtrend from the multi-decade high of 161.95 is pausing, but a strong bounce is unlikely as the yen has strengthened significantly due to Japan’s recent interventions, maintaining its momentum.

Growing expectations that the Fed will begin easing its monetary policy as early as September, with three rate cuts anticipated in 2024, are weighing on the dollar. Meanwhile, the yen has received additional support from recent discussions suggesting the BoJ may continue raising interest rates.

In this scenario, the pair may extend its losses towards the 150 support level, with limited corrections providing better selling opportunities, as daily technical studies remain firmly bearish.

The initial target is the cracked Fibonacci support at 152.39 (61.8% retracement of the 146.48/161.95 rise), followed by the 200DMA at 151.63. A break below these levels could open the way towards the 150 zone.

Any recovery should be capped under the 156 resistance zone (the base of the thickening daily cloud, falling 10DMA, and broken 38.2% Fibonacci retracement) to keep the bearish outlook intact.

Res: 154.93; 155.50; 155.70; 156.00
Sup: 153.10; 152.39; 151.94; 151.63