#USDJPY @ 135.770 drifts lower for the second straight day and retreats further from a two-month top. (Pivot Orderbook analysis)
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- USD/JPY drifts lower for the second straight day and retreats further from a two-month top.
- Fears of a US banking crisis benefit the JPY and weigh on the pair amid some USD weakness.
- The Fed-BoJ policy divergence could limit losses ahead of the US data and the FOMC decision.
The pair currently trades last at 135.770.
The previous day high was 137.78 while the previous day low was 136.31. The daily 38.2% Fib levels comes at 136.87, expected to provide resistance. Similarly, the daily 61.8% fib level is at 137.22, expected to provide resistance.
The USD/JPY pair extends the previous day’s sharp retracement slide from the 137.75-137.80 region, or a nearly two-month high and remains under heavy selling pressure for the second successive day on Wednesday. The downfall remains uninterrupted through the early European session and drags spot prices below the 136.00 mark, or a fresh weekly low in the last hour.
Concerns that several other regional US lenders were facing solvency issues fuel worries about a full-blown banking crisis and boost demand for traditional safe-haven assets, including the Japanese Yen (JPY), This, in turn, drags the USD/JPY pair lower amid the ongoing US Dollar (USD) retracement slide from a three-week top touched on Tuesday. The overnight release of the US Job Openings and Labor Turnover Survey (JOLTS) indicated that the ultra-tight US job market is loosening. Apart from this, concerns over the US debt ceiling and renewed fears of a full-blown banking crisis continue to weigh on the Greenback.
That said, a big divergence in the monetary policy stance adopted by the Bank of Japan (BoJ) and the Federal Reserve (Fed) could help limit the downside for the USD/JPY pair, at least for the time being. It is worth recalling that BoJ Governor Kazuo Ueda said last week that the risk from tightening too hastily is larger than monetary policy falling behind the curve and added that it will be appropriate to continue monetary easing to achieve the 2% inflation target. In contrast, the US central bank is widely expected to hike interest rates by another 25 bps at the end of a two-day monetary policy meeting later this Wednesday.
Market participants, however, remain divided over the possibility that the Fed will announce a pause in its rate-hiking cycle as inflation is still trending well above the central bank’s target range. That said, the risk of a banking crisis and worsening economic conditions might force the US central bank to soften its hawkish tone. The uncertainty, meanwhile, might hold back traders from placing aggressive bets around the USD/JPY pair ahead of the highly-anticipated FOMC decision, due to be announced later during the US session. This, in turn, warrants caution before positioning for any meaningful corrective fall.
Heading into the key event risk, traders on Wednesday might take cues from the US economic docket, featuring the release of the ADP report on private-sector employment and the ISM Services PMI. The key macro data might influence the USD price dynamics, which, along with the broader risk sentiment, should provide some impetus to the USD/JPY pair. That said, the immediate market reaction is more likely to remain limited.
Technical Levels: Supports and Resistances
USDJPY currently trading at 135.87 at the time of writing. Pair opened at 136.55 and is trading with a change of -0.5 % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 135.87 |
| 1 | Today Daily Change | -0.68 |
| 2 | Today Daily Change % | -0.50 |
| 3 | Today daily open | 136.55 |
The pair is trading above its 20 Daily moving average @ 133.99, above its 50 Daily moving average @ 133.93 , above its 100 Daily moving average @ 132.89 and below its 200 Daily moving average @ 136.99
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 133.99 |
| 1 | Daily SMA50 | 133.93 |
| 2 | Daily SMA100 | 132.89 |
| 3 | Daily SMA200 | 136.99 |
The previous day high was 137.78 while the previous day low was 136.31. The daily 38.2% Fib levels comes at 136.87, expected to provide resistance. Similarly, the daily 61.8% fib level is at 137.22, expected to provide resistance.
Note the levels of interest below:
- Pivot support is noted at 135.99, 135.42, 134.52
- Pivot resistance is noted at 137.45, 138.34, 138.91
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 137.78 |
| Previous Daily Low | 136.31 |
| Previous Weekly High | 136.56 |
| Previous Weekly Low | 133.01 |
| Previous Monthly High | 136.56 |
| Previous Monthly Low | 130.63 |
| Daily Fibonacci 38.2% | 136.87 |
| Daily Fibonacci 61.8% | 137.22 |
| Daily Pivot Point S1 | 135.99 |
| Daily Pivot Point S2 | 135.42 |
| Daily Pivot Point S3 | 134.52 |
| Daily Pivot Point R1 | 137.45 |
| Daily Pivot Point R2 | 138.34 |
| Daily Pivot Point R3 | 138.91 |
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