#USDJPY @ 136.194 -imp levels: keeps corrective decline intact from monthly highs.

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE and login below to read further [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• USD/JPY keeps corrective decline intact from monthly highs.
• The US dollar clings to recovery gains but Treasury yields retreat.
• Rejection at the rising channel resistance calls for a test of 50 DMA support.

The pair currently trades last at 136.194.

The previous day high was 137.71 while the previous day low was 135.81. The daily 38.2% Fib levels comes at 136.54, expected to provide resistance. Similarly, the daily 61.8% fib level is at 136.99, expected to provide resistance.

USD/JPY is keeping its corrective downside intact for the second straight day on Wednesday, as bears capitalize on retreating Treasury yields.

Looming recession risks, expectations of aggressive Fed tightening and energy crisis in China and Europe fuel risk-off flows into the save-haven US bonds, in turn, knocking down the yields across the curve.

Broad risk-aversion also helps the dollar recover some lost ground but has little to no positive impact on the major, as it reverses from monthly highs of 137.70. The greenback clings to the overnight recovery gains, as investors reassess the hawkish Fed expectations following the releases of weak US S&P Global business PMIs and New Home Sales.

Meanwhile, the yen could be drawing support from Japanese Prime Minister Fumio Kishida’s announcement of relaxation of covid border controls starting from September 7. Looking ahead, the US Durable Goods Orders and Pending Home Sales data will be closely eyed before the all-important Fed’s Jackson Hole Symposium held from August 25 to 27.

From a short-term technical perspective, bears have retained control after bulls failed to clear the rising trendline resistance at 137.71 on Tuesday.

Note that the pair has been traversing within a three-week-long rising channel formation. Rejection at the channel resistance revived the selling interest, with sellers now seeking a test of the mildly bullish 50-Daily Moving Average (DMA) support at 135.50.

The next stop for bears is seen at the horizontal 21 DMA at 134.59. The 14-day Relative Strength Index (RSI) is edging lower towards the midline, justifying the latest move lower.

Daily closing above the rising trendline resistance, now at 137.90, will confirm a bullish channel, fuelling a fresh uptrend towards the July 21 highs of 138.87.

Further up, all eyes will be on the 139.00 barrier, as bulls march towards the multi-year highs of 139.39.

Technical Levels: Supports and Resistances

USDJPY currently trading at 136.46 at the time of writing. Pair opened at 136.82 and is trading with a change of -0.26 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 134.49, 50 SMA 135.56, 100 SMA @ 132.26 and 200 SMA @ 124.02.

The previous day high was 137.71 while the previous day low was 135.81. The daily 38.2% Fib levels comes at 136.54, expected to provide resistance. Similarly, the daily 61.8% fib level is at 136.99, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 135.85, 134.88, 133.95
• Pivot resistance is noted at 137.75, 138.68, 139.65

[/s2If]
Join Our Telegram Group