USD/JPY maintains downside break heading into final stretch of the week

<p>The key catalyst for the dive lower this week was a more dovish Fed. That also led to a big rally in bonds, with 10-year yields still trading under 4% at 3.95% on the day currently. In turn, that translated to a break lower in USD/JPY below its 200-day moving average (blue line) and that puts sellers in the driver's seat.</p><p>The downside break is being maintained today, even if price action is a little more flattish overall for the dollar heading into European trading.</p><p>The gist of it is that if USD/JPY keeps below the 200-day moving average, then sellers are in control and may potentially look towards a push to 140.00 next. The onus is on buyers to try and break back above the key technical level, in order to wrestle back some control.</p><p>But after an unnerving rally in bonds over the last six weeks, alongside a more dovish Fed, it's going to be a tall order for buyers now. The BOJ will be the next key risk event for the pair in the week ahead. I would expect Ueda &amp; co. to maintain the status quo and keep alluding to the spring wage negotiations next year before saying much of anything else though.</p>

This article was written by Justin Low at www.forexlive.com.