The Asian session on Tuesday morning yesterday was surprised by the news regarding the intervention of the Japanese central bank in the market in order to support their national currency.
The Bank of Japan (BOJ) is again doing the same thing after doing it in October last year which saw a drastic price move when the value of the Yen hit a record low since 1990 against the US dollar.
The move follows the impact of the US dollar's surge after the United States (US) NFP jobs data report published last week which strengthened the king of the currency.
Although the effect seen is not very significant, but the Yen is seen showing a slight recovery when the US dollar trade is mixed following the market's reaction to the speech by the Chairman of the Federal Reserve (Fed) Jerome Powell early this morning.
Examining the price chart of the USD/JPY currency pair, the price which reached a height of around 132.900 at the beginning of the week, started to exhibit a declining pattern on Tuesday yesterday.
The price drop reached around 130,500 in the New York session yesterday before the flat price above the zone continued in today's trading (Wednesday).
A bearish signal is digested by investors when the price starts to move down below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the USD/JPY chart.
A lower drop would be expected for the price towards around 129.300 before testing last week's price support zone at 128.300.
On the other hand, if the price shows a rebound, the initial resistance to be tested is at 132.00 and the price also needs to break the MA50 barrier for an indication of a trend change.
The continuation of the continued increase will overcome the height recorded at the beginning of the week before the price to a higher level towards around 133.800 or the resistance zone at 135.00.
