USD/JPY: Inability to reclaim resistance zone at 147.40/147.80 could result in a down move – SocGen

USD/JPY trades steady above 146.50. Economists at Société Générale analyze the pair’s technical outlook.

Break below 144.50 essential to affirm deeper pullback

USD/JPY attempted a cross above the August high, however, the upward move has stalled near the interim projections of 147.40/147.80. A quick pullback is taking shape. Daily MACD has turned flattish, suggesting a lack of steady upward momentum. The inability to reclaim the resistance zone at 147.40/147.80 could result in a down move towards the recent pivot low near 144.50; this is a crucial support. 

If the pair fails to defend 144.50, there would be risk of a deeper downtrend. In such a scenario, the next potential objectives could be at 143, the 23.6% retracement from January and 141.50/141.