#USDJPY @ 138.537 is facing selling pressure above 138.50 as the risk-off impulse has lost its traction. (Pivot Orderbook analysis)

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• USD/JPY is facing selling pressure above 138.50 as the risk-off impulse has lost its traction.
• Market participants are divided on decisions over deceleration in an interest rate hike by the Fed.
• A Reuters poll claims that the BOJ could consider unwinding monetary easing in the second half of 2023.

The pair currently trades last at 138.537.

The previous day high was 139.42 while the previous day low was 137.5. The daily 38.2% Fib levels comes at 138.23, expected to provide support. Similarly, the daily 61.8% fib level is at 138.69, expected to provide resistance.

The USD/JPY pair has witnessed a rebound after dropping below 138.50 in the Asian session. The rebound seems to lack confidence and is expected to witness fresh selling pressure after dropping below the same. Meanwhile, the risk-off impulse has lost its glory as China has announced stimulus to offset bleak economic projections amid escalating Covid-19 infections.

The risk-appetite theme has recovered sharply and is impacting the US Dollar Index (DXY). The USD Index has refreshed its intraday low near 106.25 and is expected to extend its losses further. Meanwhile, the 10-year US Treasury yields have extended their gains above 3.71% ahead of the speech from Federal Reserve (Fed) chair Jerome Powell.

Market participants are divided on the decision over deceleration in the interest rate hike by the Fed. A decline in inflation in October month and rising financial risks in the United States economy have resulted in expectations for a slowdown in the rate hike pace.

Apart from that Fed’s Beige Book will also remain in focus. The Fed’s Beige Book will provide projections for growth rate and inflation, the current situation of consumer spending, and other economic catalysts. Also, the US Automatic Data Processing (ADP) Employment data will be keenly watched. The US economy is expected to display a decline in employment generation amid rising interest rates.

On the Tokyo front, the Bank of Japan (BOJ) is expected to consider unwinding the prolonged monetary easing, according to an economists’ poll by Reuters. More than 90% of economists have supported the view of phasing out monetary easing in the latter half of CY2023. This might strengthen the Japanese yen bulls further as BOJ’s ultra-loose policy has been a major factor behind the yen’s weakness.

Technical Levels: Supports and Resistances

USDJPY currently trading at 138.47 at the time of writing. Pair opened at 138.95 and is trading with a change of -0.35 % .

The pair is trading below its 20 Daily moving average @ 142.38, below its 50 Daily moving average @ 144.68 , below its 100 Daily moving average @ 141.19 and above its 200 Daily moving average @ 134.08

The previous day high was 139.42 while the previous day low was 137.5. The daily 38.2% Fib levels comes at 138.23, expected to provide support. Similarly, the daily 61.8% fib level is at 138.69, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 137.82, 136.7, 135.9
• Pivot resistance is noted at 139.75, 140.55, 141.67

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