The USDJPY currency pair continued to rise for the fourth day in a row and is currently trading at around 139.80.

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• The USD/JPY tallied a fourth consecutive day of gains and trades near 139.80.

The pair currently trades last at 139.744.

The previous day high was 139.14 while the previous day low was 137.68. The daily 38.2% Fib levels comes at 138.58, expected to provide support. Similarly, the daily 61.8% fib level is at 138.24, expected to provide support.

On Wednesday, the USD/JPY gained more than 0.60% and managed to jump near 139.80 amid JPY’s weakness. In that sense, dovish comments from Bank of Japan’s Governor Kazuo Ueda make the Yen lose interest. At the same time, the USD’s upside potential is limited by the release of weak Housing data and dovish bets on the Federal Reserve (Fed).

The US Census Bureau at the Department of Commerce released soft Housing market data from June. The Building Permits rose 1.44M but failed to live up to the expected 1.49M and came in lower than the previous 1.496M. Similarly, Housing Starts increased by 1.434M but below the 1.48M expected decelerating from the previous monthly figure of 1.559M.

As a reaction, due to the Housing market showing signs of weakness due to higher rates imposed by the Federal Reserve (Fed), investors now have more reasons to bet on a less aggressive monetary policy. For the next July 26 meeting a 25 basis point (bps) hike is almost priced in but investors are confident that the Fed won’t hike in the rest of 2023.

That said, the US Treasury yields are decreasing across the board. The 2-year stands at 4.77%, the 5-year rate at 4.00%, and the 10-year yield retreated to 3.77%, making the USD lose interest.

On the Japanese side, Governor Kazuo Ueda put a stop to rumors about a Yield Control Curve policy change, signalling that he would keep the policy unchanged in the next meeting. Because inflation is beyond the bank’s target, he stated, “Unless the premise is shifted, the whole story will remain unchanged.” These remarks caused Japanese rates to fall, indicating that markets expect the BoJ to take a dovish position.

The daily chart indicates a diminishing bearish momentum and a shift in favour of the bulls. The Relative Strength Index (RSI) is currently below its midline but exhibiting a positive slope, and the Moving Average Convergence Divergence (MACD) shows decreasing red bars, which suggests a strengthening bullish momentum.

In the broader context, the currency pair trades below the 20-day Simple Moving Average (SMA) but above the 100 and 200-day SMAs, implying that the overall outlook favours the USD.

Resistance levels: 140.35, 141.00, 142.10 (20-day SMA).
Support levels: 138.40, 137.80, 137.00 (100 and 200-day SMA convergence).

Technical Levels: Supports and Resistances

USDJPY currently trading at 139.77 at the time of writing. Pair opened at 138.84 and is trading with a change of 0.67 % .

The pair is trading below its 20 Daily moving average @ 142.22, below its 50 Daily moving average @ 140.29 , above its 100 Daily moving average @ 137.07 and above its 200 Daily moving average @ 137.02

The previous day high was 139.14 while the previous day low was 137.68. The daily 38.2% Fib levels comes at 138.58, expected to provide support. Similarly, the daily 61.8% fib level is at 138.24, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 137.97, 137.1, 136.52
• Pivot resistance is noted at 139.42, 140.0, 140.87

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