#USDJPY @ 136.278 struggles to extend the week-start pullback from two-month high. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• USD/JPY struggles to extend the week-start pullback from two-month high.
• Yields remain lackluster, stock futures print mild gains amid mond-end positioning.
• Second-tier positives for sentiment also push back the Yen pair sellers.
• Incoming BoJ Board pours cold water on face of hawkish expectations, defend YCC moves though.

The pair currently trades last at 136.278.

The previous day high was 136.56 while the previous day low was 135.92. The daily 38.2% Fib levels comes at 136.16, expected to provide support. Similarly, the daily 61.8% fib level is at 136.31, expected to provide resistance.

USD/JPY treads water around 136.10-20 during Tuesday’s Asian session while portraying the market’s inaction amid the month-end positioning and a lack of major data/events. Even so, dovish comments from the incoming Bank of Japan (BoJ) officials join cautious optimism to put a floor under the Yen price after it reversed from the two-month high on Monday.

Recently, Incoming Bank of Japan (BoJ) Deputy Governor Shinichi Uchida testified before the Japanese parliament’s Upper House while defending the central bank’s easy money policy. In doing so, Uchida rules out hopes of altering the 2.0% inflation target, as well as hopes of bolstering on the Yield Curve Control (YCC) policy.

Also read:

Previously, BoJ Deputy Governor Masazumi Wakatabe said, “Central banks must remain on guard against the potential dangers of secular stagnation and low inflation as price rises driven by cost-push factors do not last long,” per Reuters.

It should be noted that the downbeat prints of Japan Industrial Production (IP) for January contrasted with a welcome growth in the nation’s Retail Trade numbers but failed to provide any clear directions to the USD/JPY. That said, Japan’s IP shrunk 4.6% in January versus -2.6% expected and 0.3% prior growth. However, the Retail Trade grew 1.9% MoM on a seasonally adjusted basis from 1.1% prior and -0.2% market forecasts.

On the other hand, market sentiment improves on headlines suggesting the fact that the US offers an olive branch to Chinese companies despite its political differences with the dragon nation and hence challenges the USD/JPY bears due to the quote’s risk-barometer status. “Despite fraying relations with Beijing, US President Joe Biden is expected to forego expansive new restrictions on American investment in China, denying a push by some hawks in his administration and Congress,” reported Politico late Monday.

Elsewhere, mixed US data jostled with the hawkish Fed speak and the US-China tension to contribute to the lack of market’s clarity. That said, US Durable Goods Orders slumped -4.5% in January versus -4.0% expected and 5.1% prior. However, the Nondefense Capital Goods Orders ex Aircraft grew 0.8% versus 0.0% analysts’ expectations and -0.3% previous readings. On the same line, the US Pending Home Sales rallied 8.0% MoM versus 1.0% expected and 1.1% prior.

Further, Federal Reserve Governor Philip Jefferson said on Monday that it is important to get back to 2% inflation to allow those sorts of sustained economic gains. Reuters also portrayed hawkish Fed concerns while saying, “Economic data this month reflected still tight jobs markets and inflation remaining sticky, leading Fed funds futures traders to bet on higher rates, which in the US are now seen peaking in September at 5.4%, up from 4.58% now.” Hence, the hawkish Fed concerns probe the risk-takers. On the same line could be the Sino-American tension surrounding Taiwan and Russia.

Moving on, USD/JPY traders should pay attention to the risk catalysts ahead of the second-tier US data for clear directions.

Despite reversing from a three-week-old ascending resistance line, around 136.90 by the press time, USD/JPY remains bullish unless breaking the 200-day Exponential Moving Average (EMA) support of 133.90.

Technical Levels: Supports and Resistances

USDJPY currently trading at 136.22 at the time of writing. Pair opened at 136.26 and is trading with a change of -0.03 % .

The pair is trading above its 20 Daily moving average @ 132.8, above its 50 Daily moving average @ 131.77 , below its 100 Daily moving average @ 137.07 and below its 200 Daily moving average @ 137.13

The previous day high was 136.56 while the previous day low was 135.92. The daily 38.2% Fib levels comes at 136.16, expected to provide support. Similarly, the daily 61.8% fib level is at 136.31, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 135.93, 135.6, 135.28
• Pivot resistance is noted at 136.57, 136.89, 137.22

[/s2If]
Join Our Telegram Group