#USDJPY @ 130.045 meets with a fresh supply on Wednesday amid broad-based USD weakness. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• USD/JPY meets with a fresh supply on Wednesday amid broad-based USD weakness.
• Bets for smaller Fed rate hikes, softer US bond yields weigh heavily on the greenback.
• Recession fears benefit the safe-haven JPY and also contribute to the intraday decline.

The pair currently trades last at 130.045.

The previous day high was 130.89 while the previous day low was 129.04. The daily 38.2% Fib levels comes at 130.19, expected to provide resistance. Similarly, the daily 61.8% fib level is at 129.75, expected to provide support.

The USD/JPY pair comes under some selling pressure on Tuesday and reverses a major part of the previous day’s positive move, snapping a two-day winning streak. Spot prices remain on the defensive through the early European session and slip below the 130.00 psychological mark in the last hour.

The US Dollar struggles to capitalize on the overnight gains and meets with a fresh supply, which, in turn, is seen dragging the USD/JPY pair lower. The markets now seem convinced that the Federal Reserve will soften its hawkish stance amid signs of easing inflationary pressures and have been pricing in a smaller 25 bps rate hike in February. This keeps a lid on the recent recovery in the US Treasury bond yields and continues to act as a headwind for the greenback.

The Japanese Yen (JPY), on the other hand, draws support from fresh speculation that high inflation may invite a more hawkish stance from the Bank of Japan (BoJ) later this year. The bets were lifted after the latest CPI report from Japan showed that consumer inflation rose to a 41-year high level of 4% in December. Apart from this, the cautious mood – amid worries about a deeper global economic downturn – benefits the safe-haven JPY and exerts pressure on the USD/JPY pair.

The downside, meanwhile, seems cushioned, at least for the time being, as traders might prefer to move to the sidelines ahead of the highly-anticipated FOMC meeting next week. In the meantime, traders will take cues from the US economic docket – featuring the release of the flash PMI prints and the Richmond Manufacturing Index. This, along with the US bond yields, will influence the USD. Apart from this, the broader risk sentiment should provide some impetus to the USD/JPY pair.

Technical Levels: Supports and Resistances

USDJPY currently trading at 129.98 at the time of writing. Pair opened at 130.69 and is trading with a change of -0.54 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 131.01, 50 SMA 134.62, 100 SMA @ 139.99 and 200 SMA @ 136.73.

The previous day high was 130.89 while the previous day low was 129.04. The daily 38.2% Fib levels comes at 130.19, expected to provide resistance. Similarly, the daily 61.8% fib level is at 129.75, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 129.53, 128.36, 127.68
• Pivot resistance is noted at 131.37, 132.06, 133.22

[/s2If]
Join Our Telegram Group