#USDJPY @ 136.295 comes under heavy selling pressure amid a sharp USD pullback from a multi-month top. (Pivot Orderbook analysis)

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• USD/JPY comes under heavy selling pressure amid a sharp USD pullback from a multi-month top.
• The Fed-BoJ policy divergence supports prospects for the emergence of dip-buying at lower levels.
• The overnight failure to find acceptance above the 200-day SMA warrants some caution for bulls.

The pair currently trades last at 136.295.

The previous day high was 137.91 while the previous day low was 136.48. The daily 38.2% Fib levels comes at 137.37, expected to provide resistance. Similarly, the daily 61.8% fib level is at 137.03, expected to provide resistance.

The USD/JPY pair meets with a fresh supply on Thursday and extends the previous day’s modest pullback from the vicinity of the 138.00 mark, or its highest level since mid-December. The intraday selling picks up pace during the early North American session and momentarily drags spot prices below the 136.00 mark in the last hour.

The US Dollar (USD) bulls opt to take some profits off the table following the recent strong rally to over a three-month peak and turn out to be a key factor exerting pressure on the USD/JPY pair. Apart from this, the downfall could further be attributed to some repositioning trade ahead of the Bank of Japan (BoJ) monetary policy decision, scheduled to be announced during the Asian session on Friday.

The downside for the USD, however, is more likely to remain cushioned amid rising bets for a jumbo 50 bps lift-off at the March FOMC meeting. In contrast, the BoJ is expected to stick to its ultra-easy policy settings to support the fragile domestic economy. The divergent policy stance adopted by the two major central banks supports prospects for the emergence of some dip-buying around the USD/JPY pair.

From a technical perspective, the overnight failure to find acceptance above the very important 200-day Simple Moving Average (SMA) warrants caution for bullish traders. This makes it prudent to wait for a sustained move beyond the overnight swing high, around the 137.90 area, before positioning for any further gains. The USD/JPY pair might then climb to the 138.50 intermediate barrier en route to the 139.00 round figure.

On the flip side, any further decline is more likely to attract fresh buyers near the 135.35 horizontal support zone. That said, a convincing breakthrough, leading to a subsequent weakness below the 135.00 psychological mark, might shift the near-term bias in favour of bearish traders. Spot prices might then accelerate the fall towards the 134.75-134.70 area before eventually dropping to the 134.25 area and the 134.00 round figure.

Technical Levels: Supports and Resistances

USDJPY currently trading at 136.16 at the time of writing. Pair opened at 137.25 and is trading with a change of -0.79 % .

The pair is trading above its 20 Daily moving average @ 134.86, above its 50 Daily moving average @ 132.27 , below its 100 Daily moving average @ 136.25 and below its 200 Daily moving average @ 137.43

The previous day high was 137.91 while the previous day low was 136.48. The daily 38.2% Fib levels comes at 137.37, expected to provide resistance. Similarly, the daily 61.8% fib level is at 137.03, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 136.51, 135.78, 135.08
• Pivot resistance is noted at 137.95, 138.64, 139.38

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