A cross of death is upon us – OCBC

USD/JPY extended its downside move, tracking the decline in the USD, note OCBC’s Frances Cheung and Christopher Wong.

The broader direction of travel for USD/JPY is to the downside

“The pair was last seen at 142.86. Bullish momentum on the daily chart has declined while the RSI has declined. The death cross formed with the 50DMA crossing the 200DMA on the downside. The risks are tilted to the downside. Support at 142, 141.70 (August low). Resistance at 145.70 (21 DMA), 146.40 (23.6% fibo retracement from July high to August low) and 147.20 (most recent).”

“Earlier in the week, the BoJ governor presented a document to the cabinet committee, which reiterated that the BoJ will continue to raise interest rates if the economy and prices perform as the BoJ expects.”

“Fed-BoJ policy changes and the increasing pace of normalization may see UST-JGB yield spreads narrow more quickly, and this should continue to support the broader USD/JPY downtrend.”