The USDJPY pair, trading at a rate of 143.174, moves downwards on Wednesday, ending its three-day period of gains and reaching its lowest point in three weeks.
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- USD/JPY drifts lower on Wednesday and snaps a three-day winning streak to a three-week top.
The pair currently trades last at 143.174.
The previous day high was 143.55 while the previous day low was 142.21. The daily 38.2% Fib levels comes at 143.04, expected to provide support. Similarly, the daily 61.8% fib level is at 142.72, expected to provide support.
The USD/JPY pair meets with some supply during the Asian session on Wednesday and erodes a part of the previous day’s strong gains to the 143.55 area, or over a three-week high. Spot prices, however, manage to rebound a few pips from the daily low and currently trade just above the 143.00 mark, down less than 0.20% for the day.
The US Dollar (USD) weakens a bit after Fitch downgraded the US government’s credit rating to AA+ from AAA, citing concerns over the state of the country’s finances and its debt burden. The announcement took its toll on the global risk sentiment, which is evident from a modest downfall in the US equtiy futures and benefits the safe-haven Japanese Yen (JPY). Apart from this, the Bank of Japan (BoJ) noted that there is strong chance consumer inflation will moderate, but won’t slow back below 2%, toward middle of current fiscal year. This lends additional support to the JPY and exerts some downward pressure on the USD/JPY pair.
That said, the minutes from the BoJ policy meeting revealed that members agreed to maintain the current easy monetary policy. Moreover, BoJ Governor Kazuo Ueda had said that the central bank won’t hesitate to ease policy further and added that more time was needed to sustainably achieve the 2% inflation target. This, in turn, keeps a lid on any meaningful gains for the JPY. Apart from this, the emergence of some USD dip-buying assists the USD/JPY pair to recover over 40 pips from the daily trough, warranting some caution before placing aggressive bearish bets and positioning for any meaingful intraday depreciating move.
The incoming US macro data continues to point to an extremely resilient economy and keeps the door open for one more 25 bps rate hike by the Federal Reserve (Fed) in September or November. Against the backdrop of the upbeat US GDP report released last week, data showed factory production rebounded in the second quarter and ended two straight quarterly declines. Moreover, US construction spending increased solidly last month and May’s data was revised higher. Adding to this, JOLTS report remains consistent with tight labor market conditions and supports prospects for further policy tightening by the Fed.
Market participants now look to the US economic docket, featuring the release of the ADP report on private-sector employment. This, along with the broader risk sentiment, will be looked upon for short-term trading opportunities around the USD/JPY pair. The market focus, however, will remain glued to the closely-watched US monthly employment details, popularly known as the NFP report, due on Friday.
Technical Levels: Supports and Resistances
USDJPY currently trading at 143.09 at the time of writing. Pair opened at 143.33 and is trading with a change of -0.17 % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 143.09 |
| 1 | Today Daily Change | -0.24 |
| 2 | Today Daily Change % | -0.17 |
| 3 | Today daily open | 143.33 |
The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 140.79, 50 SMA 141.13, 100 SMA @ 137.6 and 200 SMA @ 136.64.
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 140.79 |
| 1 | Daily SMA50 | 141.13 |
| 2 | Daily SMA100 | 137.60 |
| 3 | Daily SMA200 | 136.64 |
The previous day high was 143.55 while the previous day low was 142.21. The daily 38.2% Fib levels comes at 143.04, expected to provide support. Similarly, the daily 61.8% fib level is at 142.72, expected to provide support.
Note the levels of interest below:
- Pivot support is noted at 142.51, 141.69, 141.18
- Pivot resistance is noted at 143.85, 144.37, 145.19
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 143.55 |
| Previous Daily Low | 142.21 |
| Previous Weekly High | 141.82 |
| Previous Weekly Low | 138.07 |
| Previous Monthly High | 144.91 |
| Previous Monthly Low | 137.24 |
| Daily Fibonacci 38.2% | 143.04 |
| Daily Fibonacci 61.8% | 142.72 |
| Daily Pivot Point S1 | 142.51 |
| Daily Pivot Point S2 | 141.69 |
| Daily Pivot Point S3 | 141.18 |
| Daily Pivot Point R1 | 143.85 |
| Daily Pivot Point R2 | 144.37 |
| Daily Pivot Point R3 | 145.19 |
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