According to Reuters, it was announced on Friday that Shigeru Ishiba, known for his tough stance on interest rates, will become Japan’s next Prime Minister.
This news caused a sharp intraday reversal in the USD/JPY exchange rate on Friday: while the price initially rose in the morning (as shown by the arrow), it was followed by a sharp downward impulse later in the day.
Technical analysis of the USD/JPY chart shows:
→ The price made a false bullish breakout of the upper boundary of the descending channel before retreating back inside it;
→ The price broke the upward trend (marked by blue lines);
→ The ¥143 level shifted from support to resistance;
→ The current support comes from a line drawn below the blue channel (shown by the dotted line).
This suggests that the bears may have taken control, and if their pressure intensifies, the USD/JPY pair could head lower towards the median line of the red channel.
Note: Around 21:00 GMT+3 today, Federal Reserve Chair Jerome Powell is scheduled to speak in Nashville at the annual meeting of the National Association for Business Economics. His remarks could trigger increased volatility in the USD/JPY exchange rate.
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