#USDJPY @ 128.668 prints three-day losing streak despite recent bounce off weekly low. (Pivot Orderbook analysis)

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• USD/JPY prints three-day losing streak despite recent bounce off weekly low.
• BoJ’s Wakatabe appears determined to tame inflation, praises YCC move.
• US 10-year Treasury bond yields dribble around two-week low.
• Second-tier US data, other central bank announcements can please Yen bears before Friday’s US NFP

The pair currently trades last at 128.668.

The previous day high was 130.41 while the previous day low was 128.54. The daily 38.2% Fib levels comes at 129.25, expected to provide resistance. Similarly, the daily 61.8% fib level is at 129.7, expected to provide resistance.

USD/JPY pares intraday losses around 128.60 during the three-day downtrend as the market slips into consolidation mode ahead of the second round of central bank dossier amid early Thursday.

The Yen pair dropped to its lowest levels in two weeks earlier in the day while extending the Federal Reserve (Fed) induced losses amid downbeat Treasury bond yields. That said, the US 10-year Treasury yields slumped the most in two weeks while testing the lowest levels in a fortnight the previous day after the US Federal Reserve (Fed) announced its dovish hike of 0.25%. The US central bank unveiled receding fears of inflation and Chairman Jerome Powell showed readiness for cutting the rates if inflation drops faster, which in turn drowned the US Dollar and yields. The same propelled the risk-on mood and favored Wall Street bulls.

On the other hand, hawkish comments from Bank of Japan (BoJ) officials also favored the GBP/JPY bears. That said, Bank of Japan’s Deputy Governor Masazumi Wakatabe has said the BoJ will continue to conduct monetary policy to achieve 2% inflation accompanied by wage growth. The Japanese central bank has recently conducted multiple bond market moves to defend the Yields Curve Control (YCC) policy. BoJ’s Wakatabe was recently heard praising the YCC move of the BoJ.

It should be noted, however, that the comments from BoJ’s Wakatabe also ruled out the market’s fears of any immediate move, which in turn allowed USD/JPY to lick the Fed-inflicted wounds.

Amid these plays, the S&P 500 Futures print mild gains while Japan’s Nikkei 225 follows the suit as traders await another round of central bank announcements, this time from the European Central Bank (ECB) and the Bank of England (BoE).

In addition to the central bank news, US Factory Orders for December, expected 2.3% versus -1.8% prior, and the US Preliminary Nonfarm Productivity for the fourth quarter (Q4), expected 2.4% versus 0.8% prior. Above all, Friday’s US jobs report for January will be crucial to follow for clear directions.

The successful downside break of the 13-day-old ascending trend line, around 129.40 by the press time, directs USD/JPY bears towards the previous monthly low of near 127.20.

Technical Levels: Supports and Resistances

USDJPY currently trading at 128.6 at the time of writing. Pair opened at 128.83 and is trading with a change of -0.18 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 130.14, 50 SMA 133.17, 100 SMA @ 139.05 and 200 SMA @ 136.79.

The previous day high was 130.41 while the previous day low was 128.54. The daily 38.2% Fib levels comes at 129.25, expected to provide resistance. Similarly, the daily 61.8% fib level is at 129.7, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 128.11, 127.39, 126.24
• Pivot resistance is noted at 129.98, 131.13, 131.85

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