Reuters reported on Friday that Shigeru Ishiba, known for his firm stance on interest rates, is set to become Japan’s next Prime Minister.
This news triggered a sharp reversal in the USD/JPY exchange rate. While the price initially rose in the morning (as indicated by the arrow), it experienced a significant downward shift later in the day.
Technical analysis of the USD/JPY chart reveals:
- A false bullish breakout of the descending channel’s upper boundary, with the price returning inside;
- A break in the upward trend (marked by blue lines);
- The ¥143 level transitioned from support to resistance;
- The current support is coming from a line drawn below the blue channel (represented by a dotted line).
This suggests that bears have gained momentum, and if pressure continues, the USD/JPY pair could move lower towards the red channel’s median line.
Additionally, Fed Chair Jerome Powell’s speech at the National Association for Business Economics in Nashville, scheduled for 21:00 GMT+3 today, could lead to heightened volatility in the USD/JPY exchange rate.
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