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The USDJPY has reached a new session low, breaking the Asian session low near 132.49 and surpassing yesterday's low of 132.20, with the price hitting 132.165. NASDAQ futures, which started the New York session higher, have now slipped into negative territory, along with the S&P and Dow Jones Industrial Average. US Treasury yields remain negative, with the 2-year yield down 6.3 basis points at 4.692% and the 10-year yield down 6.5 basis points at 3.428%. Lower yields and lower stock prices tend to weaken the USDJPY.
Technically, examining the 4-hour chart above, the price experienced a rebound yesterday, approaching its rising 200-bar moving average on the 4-hour chart, currently at 133.693. The price reached 133.76 yesterday before turning back downward. Today's price action has oscillated above and below a swing area between 132.70 and 132.90, with the recent downward move increasing the potential for bearish momentum (see red numbered circles). Traders anticipating further declines would prefer the price not to rise above 132.902 now (close risk for sellers looking for more downside). A move back above would disappoint the sellers.
The next downside target area lies between 131.29 and 131.567 (indicated by green numbered circles on the chart below).
The European Central Bank's (ECB) rate decision is expected in about five minutes, with market sentiment shifting towards a 25 basis point increase.
