• USD/JPY reverses from three-week high, prints the first daily loss in four as BoJ’s Uchida sounds hawkish.
• 61.8% Fibonacci retracement, 21-DMA limits Yen pair’s downside amid bullish MACD signals.
• Descending trend line from late October 2022 appears a tough nut to crack for bulls.

USD/JPY slides to 142.80 as it fades bounce off intraday low heading into Wednesday’s European session. In doing so, the Yen pair reverses from the highest levels in three weeks while poking the 61.8% Fibonacci retracement of October 2022 to January 2023 downside.

That said, hawkish comments from Bank of Japan (BoJ) Deputy Governor Shinichi Uchida, suggesting a likely tweak to the central bank’s Yield Curve Control (YCC) policy, recently drowned the USD/JPY pair, which in turn snapped a three-day winning streak by the press time.

However, the key Fibonacci retracement level surrounding 142.50, also known as the golden Fibonacci ratio, challenges the USD/JPY bears amid bullish MACD signals.

Even if the quote drops below 142.50 support, the 21-DMA level of around 140.90 and the 140.00 psychological magnet will test the USD/JPY sellers.

Following that, the 50% Fibonacci retracement level and a four-month-old support line, near 139.60 and 138.70 in that order, will be in the spotlight.

On the contrary, a descending trend line from October 2022, close to 144.20 at the latest, precedes the yearly high of around 144.90 and the 145.00 round figure to challenge the USD/JPY buyers.

USD/JPY: Daily chart

Trend: Limited downside expected