#USDJPY @ 141.347 comes under fresh selling pressure on Tuesday amid broad-based USD weakness. (Pivot Orderbook analysis)

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• USD/JPY comes under fresh selling pressure on Tuesday amid broad-based USD weakness.
• Bets for smaller rate hikes by the Fed, sliding US bond yields weigh heavily on the greenback.
• The Fed-BoJ policy divergence could undermine the JPY and help limit any meaningful slide.

The pair currently trades last at 141.347.

The previous day high was 142.25 while the previous day low was 140.16. The daily 38.2% Fib levels comes at 141.45, expected to provide resistance. Similarly, the daily 61.8% fib level is at 140.96, expected to provide support.

The USD/JPY pair struggles to capitalize on the previous day’s breakout momentum beyond the 100-day SMA and meets with a fresh supply on Tuesday. The pair remains depressed through the early North American session, albeit manages to rebound a few pips from the vicinity of the 141.00 mark, or the daily low.

The US Dollar comes under some renewed selling pressure and stalls its recent strong recovery from a three-month low, which, in turn, is exerting downward pressure on the USD/JPY pair. Investors now seem convinced that the Federal Reserve will slow the pace of its rate-hiking cycle and have been pricing in a greater chance of a relatively smaller 50 bps lift-off in December. This leads to a fresh leg down in the US Treasury bond yields and keeps the USD bulls on the defensive.

That said, the recent hawkish remarks by several Fed officials suggest that the US central bank will continue to tighten its monetary policy to curb inflation. In contrast, the Bank of Japan, so far, has shown no inclination to hike interest rates. In fact, BoJ Governor Haruhiko Kuroda reiterated on Friday that the central bank will stick to its monetary easing to support the economy and added that raising rates now would be inappropriate in light of current economic conditions.

This marks a big divergence in the monetary policy stance adopted by the two major central banks, which might continue to undermine the Japanese Yen. Apart from this, a slight recovery in the global risk sentiment, which tends to dent demand for traditional safe-haven currencies, including the JPY, might contribute to limiting losses for the USD/JPY pair. Investors might also prefer to wait for a fresh catalyst from the FOMC meeting minutes, due for release on Thursday.

Hence, it will be prudent to wait for strong follow-through selling before confirming that the recent bounce from the lowest level since August 29 has run out of steam. Next on tap is the release of the Richmond Manufacturing Index from the US. This, along with a scheduled speech by Cleveland Fed President Loretta Mester, might influence the USD price dynamics and allow traders to grab short-term opportunities around the USD/JPY pair.

Technical Levels: Supports and Resistances

USDJPY currently trading at 141.33 at the time of writing. Pair opened at 142.07 and is trading with a change of -0.52 % .

The pair is trading below its 20 Daily moving average @ 144.36, below its 50 Daily moving average @ 145.08 , above its 100 Daily moving average @ 141.03 and above its 200 Daily moving average @ 133.47

The previous day high was 142.25 while the previous day low was 140.16. The daily 38.2% Fib levels comes at 141.45, expected to provide resistance. Similarly, the daily 61.8% fib level is at 140.96, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 140.74, 139.41, 138.65
• Pivot resistance is noted at 142.83, 143.59, 144.92

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