#USDJPY @ 138.649 fades bounce off three-month low, renews intraday low of late. (Pivot Orderbook analysis)

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• USD/JPY fades bounce off three-month low, renews intraday low of late.
• Japan Unemployment Rate remained unchanged, Retail Trade eased in October.
• China Covid woes, protests join hawkish Fedspeak to challenge bears.
• Second-tier US data will decorate the calendar ahead of the key US jobs report.

The pair currently trades last at 138.649.

The previous day high was 139.42 while the previous day low was 137.5. The daily 38.2% Fib levels comes at 138.23, expected to provide support. Similarly, the daily 61.8% fib level is at 138.69, expected to provide resistance.

USD/JPY takes offers to renew intraday low near 138.60 as Tokyo opens on Tuesday. The Yen pair’s latest losses could be linked to the recent retreat by the US Treasury yields, as well as mixed data from Japan. In doing so, the risk barometer pair fails to respect the US Dollar strength, mainly backed by the hawkish comments from the Federal Reserve (Fed) policymakers and the Covid woes emanating from China.

Japan’s Unemployment Rate reprinted 2.6% mark for October versus 2.5% expected whereas Jobs / Applicants Ratio improved to 1.35 by matching upbeat forecasts compared to 1.34 prior. Further, Japan’s Retail Trade eased to 4.3% YoY during the stated month, versus 5.0% market consensus and 4.8% (revised up) prior, while the monthly Retail Trade rose 0.2% compared to downbeat forecasts of -0.3% and 1.1% previous readings.

Elsewhere, the US 10-year Treasury yields ease to 3.688%, down 1.4 basis points (bps), as traders weigh comments from the Fed speakers.

That said, Richmond Federal Reserve Bank President Thomas Barkin recently mentioned that he supports smaller interest-rate hikes ahead as the central bank moves to bring down too-high inflation. Previously, Cleveland Fed President Loretta Mester marked the need to see several more good inflation reports and more signs of moderation to back the pause in rate hikes. On the same line, St. Louis Fed President James “Jim” Bullard stated that the situation calls for much higher interest rates than what we’ve been used to. Further, New York Federal Reserve Bank President John Williams said that he believes the Fed will need to raise rates to a level sufficiently restrictive to push down on inflation and keep them there for all of next year. Additionally, Fed Vice Chair Lael Brainard advocated for tighter monetary policy while citing risk-management reasons.

China refreshed the all-time high daily Covid infections by printing around 40,300 new cases and justified the government’s status quo on the Zero-Covid policy despite the widespread protests to turn down the same. “Hundreds of demonstrators and police clashed in Shanghai on Sunday night as protests over the restrictions flared for the third day and spread to several cities, with police on Monday stopping and searching people at the sites of weekend protests in Shanghai and Beijing,” reported Reuters.

Against this backdrop, the market sentiment remains sluggish and weighs on the US stock futures, following a downbeat performance of Wall Street.

Moving on, the monthly US Confederation Board’s (CB) Consumer Confidence for November will join multiple speeches from the Fed policymakers to entertain USD/JPY traders ahead of Friday’s key US employment data. However, major attention should be given to the central bankers and the Coronavirus updates for clear directions.

A two-week-old descending trend line restricts the short-term USD/JPY upside near 139.50.

Technical Levels: Supports and Resistances

USDJPY currently trading at 138.72 at the time of writing. Pair opened at 138.95 and is trading with a change of -0.17% % .

The pair is trading below its 20 Daily moving average @ 142.38, below its 50 Daily moving average @ 144.68 , below its 100 Daily moving average @ 141.19 and above its 200 Daily moving average @ 134.08

The previous day high was 139.42 while the previous day low was 137.5. The daily 38.2% Fib levels comes at 138.23, expected to provide support. Similarly, the daily 61.8% fib level is at 138.69, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 137.82, 136.7, 135.9
• Pivot resistance is noted at 139.75, 140.55, 141.67

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