USD/JPY to resume the decline once below 103.15

USD/JPY is consolidating around 103.50 as the greenback recovers some ground. Nonetheless, the pair is still at risk of falling and could resume the slide on a break below 103.15, FXStreet’s Chief Analyst Valeria Bednarik reports.

Key quotes

“The American currency is correcting extreme overbought conditions, helped by a falling pound amid cooling Brexit optimism. The lack of progress in a US stimulus package also weighs on the market’s mood, although both negotiations are expected to continue over the next few days.”

“Japan published at the beginning of the day, November national inflation, which contracted further, to -0.9% YoY. The Bank of Japan had a monetary policy meeting, and as widely anticipated, the current policy was left unchanged. Even further, Governor Haruhiko Kuroda said that policymakers won’t review the monetary policy objectives.”

“USD/JPY has corrected oversold conditions, but its bullish potential is limited. The pair will likely resume its decline on a break below 103.15, the immediate support.”