It is quite evident that the dollar is currently facing a great amount of pressure as the technicals suggest that the pair is going to move downward. Yesterday’s drop below 130.00 confirms the downward trend witnessed in the last stages of last year, with no signs of a reversal in sight.
The range of 126.45-55, the May lows, is the next support area, and the psychological 125.00 mark is the one that follows. The US CPI data from yesterday was not of help to the dollar, however this is not the only factor influencing the pair’s performance. The rising conjecture that the BOJ might take action or at least hint at it during the upcoming meeting is what is driving the pair in the past two days, according to my opinion.
Hence, traders are concerned that the BOJ might deliver another unexpected decision in consecutive meetings. Regardless, the charts are now making the most noise, and the break below 130.00 overnight opens up the possibility of further downward pressure.
