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Bulls hold territory ahead of BoJ decision, closes winning week

by SuperiorInvest


  • The USD/JPY pair posted modest gains to settle at 148.25.
  • No policy changes are expected at next week’s BoJ meeting; management will be considered.
  • Despite the bearish undertones in the chart’s four-hour outlook, the pair’s position above the 20,100,200 daily SMA suggests wider bullish control.

At Friday’s meeting USD/JPY it has been seen rising slightly, currently trading at 148.25 and closing out a 2% winning week. The daily chart is dominated by bullish sentiments, the bulls are firmly holding their position but seem to have taken a breather. Bulls could get another boost next week if the Bank of Japan (BoJ) doesn’t provide further clues about its Monetary Policy false.

On the USD side, it remains resilient with recovering US yields and positive consumer sentiment data from the University of Michigan (UoM) adding further support to the greenback. Next week, markets will watch December’s personal consumption expenditures (PCE) data, the Federal Reserve (Fed) prioritized the inflation rate to continue betting on the next decision. Dovish expectations eased somewhat this week, but are still high, and according to the CME FedWatch Tool, the chances of a cut in March and May are around 50% and 45%, respectively.

USD/JPY Technical Analysis

On a daily basis, technical indicators are reflecting bullish strength, maintaining a firm position, but buyers are running out of breath. The Relative Strength Index (RSI) is showing a slight positive slope in positive territory, while the flat green bars of the Moving Average Convergence Divergence (MACD) further confirm the positive outlook, but with a slight slowdown. Moreover, the pair’s position well above the 20-, 100-, and 200-day simple moving averages (SMA) suggests that buying momentum is outweighing any bearish undertones, giving the bulls overall command.

USD/JPY Daily Chart

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