The USDJPY pair at a rate of 147.687 showed signs of improvement on Tuesday, but without strong confidence in a bullish trend.

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• USD/JPY regains positive traction on Tuesday, though the uptick lacks bullish conviction.

The pair currently trades last at 147.687.

The previous day high was 147.88 while the previous day low was 147.56. The daily 38.2% Fib levels comes at 147.68, expected to provide support. Similarly, the daily 61.8% fib level is at 147.76, expected to provide resistance.

The USD/JPY pair attracts some dip-buying on Tuesday, albeit struggles to capitalize on the modest uptick and remains below its highest level since November 2022 touched last week. Spot prices trade around the 147.70 region, up less than 0.10% for the day, as traders keenly await this week’s key central bank event risks.

The Federal Reserve (Fed) is scheduled to announce its decision on Wednesday and is widely anticipated to maintain the status quo. Market players, however, seem convinced that the US central bank will stick to its hawkish stance and keep rates higher for longer. The outlook remains supportive of elevated US Treasury bond yields, which assists the US Dollar (USD) to stall its corrective pullback from a six-month peak and lends support to the USD/JPY pair.

That said, speculations of an imminent shift in the Bank of Japan (BoJ) dovish stance hold back traders from placing fresh bullish bets around the major. BoJ Governor Kazuo Ueda, in an interview with Yomiuri newspaper, said that ending negative interest rates is among the options available if the central bank becomes confident that prices and wages will keep going up sustainably. This, in turn, lifted bets that the BoJ could move away from ultra-loose policy.

Hence, the spotlight will also be on the BoJ policy meeting on Friday. Investors will look for any forward guidance on when the Japanese central bank’s negative interest rate policy will be reversed. This, in turn, will play a key role in influencing the JPY and provide a fresh directional impetus to the USD/JPY pair. In the meantime, traders on Tuesday might take cues from the US housing market data – Building Permits and Housing Starts – to grab short-term opportunities.

From a technical perspective, the rangebound price moves witnessed over the past two weeks or so might still be categorized as a bullish consolidation phase against the backdrop of the recent runup to a multi-month peak. This, in turn, suggests that the path of least resistance for the USD/JPY pair is to the upside. However, it will still be prudent to wait for a breakout through the trading range resistance, just ahead of the 148.00 mark, before positioning for further gains.

Technical Levels: Supports and Resistances

USDJPY currently trading at 147.71 at the time of writing. Pair opened at 147.61 and is trading with a change of 0.07 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 146.72, 50 SMA 144.0, 100 SMA @ 141.92 and 200 SMA @ 137.4.

The previous day high was 147.88 while the previous day low was 147.56. The daily 38.2% Fib levels comes at 147.68, expected to provide support. Similarly, the daily 61.8% fib level is at 147.76, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 147.48, 147.36, 147.16
• Pivot resistance is noted at 147.8, 148.0, 148.12

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