#USDJPY @ 130.113 US Dollar tumbles during the American session as FOMC meeting kicks off. (Pivot Orderbook analysis)

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• US Dollar tumbles during the American session as FOMC meeting kicks off.
• US yields move down, then rebounds, making USD/JPY volatile.
• The pair trades above 130.00 after hitting a fresh daily low at 129.73.

The pair currently trades last at 130.113.

The previous day high was 130.57 while the previous day low was 129.21. The daily 38.2% Fib levels comes at 130.05, expected to provide support. Similarly, the daily 61.8% fib level is at 129.73, expected to provide support.

The USD/JPY tumbled and then redounded during the American session, but overall it remained in a familiar range, hovering around 130.00

The surprise of the day so far was the influence of the Employment Cost Index (ECI). The numbers triggered price action across financial markets. The ECI rose 1% in the fourth quarter, below the 1.1% of market consensus. It points to a continuation of the slowdown in inflation. Following the report, the Dollar tumbled, Wall Street soared and Treasury yields rose.

A different economic report showed the S&P/Case-Shiller Home Price Index rose by 6.8% (y/y) in November below the 6.9% of market consensus and the 8.7% of the previous month. Conference Board announced the Consumer Confidence Index came in at 107.1 in January below the expected 109.0.

The two-day FOMC meeting has started. Market participants expect the Federal Reserve to raise interest rates by 25 basis points. The focus will be on the statement and the projections. Analysts will look for clues about the future path of monetary policy.

The USD/JPY bottomed at 129.73 after the ECI. It was rejected from under 130.00 as US yields rebounded amid risk appetite. It climbed to the 130.20 area. Despite the moves, the pair continues to trade within last week’s range.

A consolidation above the upper limit around 130.50 should clear the way to more gains while below 129.00, the slide could accelerate. Before the 129.00 zone, an intermediate support is located at 129.60.

Technical Levels: Supports and Resistances

USDJPY currently trading at 130.16 at the time of writing. Pair opened at 130.46 and is trading with a change of -0.23 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 130.37, 50 SMA 133.6, 100 SMA @ 139.34 and 200 SMA @ 136.77.

The previous day high was 130.57 while the previous day low was 129.21. The daily 38.2% Fib levels comes at 130.05, expected to provide support. Similarly, the daily 61.8% fib level is at 129.73, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 129.59, 128.72, 128.23
• Pivot resistance is noted at 130.95, 131.44, 132.32

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