Nov 20 (Reuters) - USD/JPY's very bearish double-top with 2023-22 peaks at 151.92/94 suggests the eventual unwinding of Fed rate hikes will see more of 2023's uptrend retraced.
However, given the aggressive pricing of Fed rate cuts, investors may require corroboration in the form of higher jobless claims and less push back by policymakers.
USD/JPY fell to 148.10, probing below daily cloud top, lower 30-day Bolli and 23.6% of the July-November rise at 148.52/44/32 after the 149.99 session high ran into a wall of spec sellers running for the exit. IMM net spec longs last week hit their highest since 2017 just as 2022's 32-year peak at 151.94 was unsuccessfully challenged.
Any corrective USD/JPY bounce faces resistance by 149 and critically by the converged daily tenkan and kijun at 150.01 on EBS.
Traders may find direction from Tuesday's FOMC minutes and Thursday's jobless claims, as well as comments from Fed speakers amid the sharp easing of financial conditions recently.
A close below 148 is needed, however, before a slide to the 100-day moving average, now at 146.54, can be contemplated.
That MA is set to converge with the daily cloud base on Thursday, in the wake of initial claims data from the week of November's jobs report. If initial claims unexpectedly rise along with already up-trending continued claims, the 100-DMA support would follow, with September's 144.44 low possible on soft November data.
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(Randolph Donney is a Reuters market analyst. The views expressed are his own.)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.