#USDJPY @ 137.214 US Dollar dips modestly from three-month highs. (Pivot Orderbook analysis)

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• US Dollar dips modestly from three-month highs.
• USD/JPY sits tight as investors now focus on February jobs data in Nonfarm Payrolls.

The pair currently trades last at 137.214.

The previous day high was 137.2 while the previous day low was 135.54. The daily 38.2% Fib levels comes at 136.56, expected to provide support. Similarly, the daily 61.8% fib level is at 136.17, expected to provide support.

USD/JPY is flat near 137 the figure and within the day’s range of between 136.47 and 137.91 while the greenback dips modestly from three-month highs reached earlier on Wednesday following Federal Reserve Chairman Jerome Powell on Tuesday.

The US Dollar index, DXY, was reaching 105.88, the highest since Dec. 1 as the Fed chair surprised markets with a more hawkish rate outlook. Powell said that the Fed will likely need to raise interest rates more than expected in response to recent strong data and is prepared to move in larger steps if the “totality” of incoming information suggests tougher measures are needed to control inflation.

This has led the Fed funds futures markets to price in a 66% probability of a 50 basis-point hike at the Fed’s March 21-22 meeting, up from around 22% before Powell spoke on Tuesday. The rate is now expected to peak at 5.62% in September. ”Looking ahead, 25 bp hikes in May and June are priced in that would take Fed Funds to 5.50-5.75%, with nearly 30% odds of a last 25 bp hike in Q3 that would move the range up to 5.75-6.0%,” analysts at Brown Brothers Harriman said.

”After all this, an easing cycle is still expected to begin in Q4, albeit at much lower odds. Eventually, it should be totally and unequivocally priced out into 2024 during the next stage of Fed repricing. For now, we believe the uptrends in US yields and the dollar remain intact,” the analysts added.

Looking ahead, investors are now focused on February jobs data in Nonfarm Payrolls that is due on Friday. Another 280k increase would be unambiguously strong following a 517k increase in January, analysts at Societe Generale said. ”There is room for potentially greater giveback on the January increase, which was likely aided by warm weather. We see readings above a 150,000-175,000 threshold as strong, since over time such a pace would contribute to further declines in the unemployment rate.”

Technical Levels: Supports and Resistances

USDJPY currently trading at 137.1 at the time of writing. Pair opened at 137.14 and is trading with a change of -0.03 % .

The pair is trading above its 20 Daily moving average @ 134.57, above its 50 Daily moving average @ 132.22 , above its 100 Daily moving average @ 136.38 and below its 200 Daily moving average @ 137.4

The previous day high was 137.2 while the previous day low was 135.54. The daily 38.2% Fib levels comes at 136.56, expected to provide support. Similarly, the daily 61.8% fib level is at 136.17, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 136.06, 134.97, 134.4
• Pivot resistance is noted at 137.71, 138.28, 139.37

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