USD/JPY is picking up some upside momentum once again after BOJ leadership candidate Kazuo Ueda appeared in front of parliament last week. He supported the current ultra-loose monetary policy as necessary and is in no rush to change it, with any adjustments depending on upcoming data. He also failed to give a comment on yield curve control bands which disappointed traders that were hoping to see some policy normalisation from the likely new Governor.
He will appear again this week and is expected to be appointed in March, ready to take the role when Kuroda steps down in April. USD/JPY is edging towards a two-month high after having lost some momentum in recent sessions but it's likely that the pair will face some resistance up ahead as it approaches the 136 psychological mark followed by an area of confluence around 136.85.
Meanwhile, the US Dollar Index has managed to regain some upside while GBP/USD had a good run at the beginning of last week but has found resistance within a bearish SMA cross (20-day below 50-day). GBP/USD also has some good support from the bullish cross of the 100-day SMA above the 200-day SMA around 1.1935 meaning that further sideways consolidation is likely.
EUR/USD has been trending downwards but has found support at the 28.2% Fibonacci (1.0573) from the 1.2260-0.9530 drop between May 2021 and September 2022. The path of least resistance remains firmly to the downside but new sellers are finding it hard to determine a good reason to come in, meaning momentum has been left depleted in the short term.
The RSI is starting to venture into oversold territory so we may see a slight rebound from here, but gains are likely limited above 1.0695, whilst support may arise around the 2023 lows at 1.0481.
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