USDJPY Breaks Key 150 Support Level Amid Rising BOJ Rate Hike Expectations
The USDJPY slid to a six-week low on Friday, accelerating its decline following a stronger-than-expected rise in Tokyo’s November inflation, which heightened market anticipation of a Bank of Japan rate hike in next month’s policy meeting.
The decline breached critical support levels at 150.18/00, marked by the 38.2% Fibonacci retracement of the 139.57/156.74 rally and the psychological 150 threshold, reinforced by the 55-day moving average. A weekly close below these levels would solidify a bearish outlook, targeting the next key support at 149.21, the top of a rising and thickening daily Ichimoku cloud.
Despite dipping to 149.52 intraday, a rebound above the 150 level suggests bears may encounter resistance in this zone.
The daily chart remains bearish, with strengthening negative momentum and the potential formation of a 5/200DMA death cross. However, this is tempered by the supportive influence of the rising daily Ichimoku cloud and oversold stochastic readings.
Today’s close relative to the pivotal 150 zone will provide a crucial near-term directional signal. While a bearish bias persists below the 200DMA at 151.98, the broader technical structure on the weekly chart remains bullish, despite the pair being poised for its first significant weekly loss after eight consecutive weeks of gains.
Two scenarios could unfold:
- A sustained hold above the 150 zone may signal a corrective rebound before broader bullish momentum resumes.
- A decisive break below 150 could deepen the correction of the two-month rally, paving the way for further declines.
Res: 150.45; 150.74; 151.28; 151.95
Sup: 149.52; 149.21; 148.71; 148.16
