The USD/JPY pair retreated from its recent high of 143.00, dropping by over 0.28% due to a mix of economic data from the United States (US) that increased expectations for the Federal Reserve’s first rate cut next week. As of now, the pair is trading at 141.96.
The pair remains under a downward trend, though Wednesday's long tail suggests a possible short-term rebound and a test of key resistance levels. Despite this, bearish sentiment persists as indicated by the Relative Strength Index (RSI), which shows a flat slope, hinting at potential consolidation in the near term.
Key Levels to Watch for USD/JPY Movement
If USD/JPY closes below 142.00 on a daily basis, it may open the door for traders to push prices towards the September 11 low of 140.71. A breach of this level would expose the pair to further downside, targeting the December 28, 2023 cycle low of 140.25, with an eventual move toward 140.00.
On the upside, initial resistance is at the 142.00 mark. If surpassed, the pair could aim for the September 12 high of 143.04, followed by the Tenkan-Sen at 143.96 and finally the Senkou Span A at 144.50.
