USD/JPY: Bears need to break below 21, 50 DMAs – OCBC

USD/JPY saw a short squeeze yesterday before heading lower, tracking the broad decline in USD. Pair was last at 143.92 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

USD/JPY to trade lower

"Bullish momentum on daily chart shows it is fading while RSI fell. Gravestone doji (formed on Mon) is typically associated with a bearish reversal and had seen follow-thru in price action so far this week. Risks remain skewed to the downside."

"Next support at 142.50. Resistance at 146.50 (100 DMA), 147.15 (38.2% fibo retracement of 2025 high to low. We continue to look for USD/JPY to trade lower, premised on Fed likely to cut in due course and BoJ resuming policy normalisation while “sell USD” narrative remains alive)."