#USDJPY @ 134.325 retreats sharply from a one-week high amid the emergence of fresh USD selling. (Pivot Orderbook analysis)

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• USD/JPY retreats sharply from a one-week high amid the emergence of fresh USD selling.
• The softer headline US CPI print reaffirms dovish Fed expectations and weighs on the USD.
• A positive risk tone could undermine the safe-haven JPY and help limit losses for the pair.

The pair currently trades last at 134.325.

The previous day high was 135.36 while the previous day low was 134.72. The daily 38.2% Fib levels comes at 135.12, expected to provide resistance. Similarly, the daily 61.8% fib level is at 134.97, expected to provide resistance.

The USD/JPY pair attracts some sellers in the vicinity of mid-135.00s, or a one-week high touched this Wednesday, and the intraday descent picks up pace following the release of the US consumer inflation figures. Spot prices drop to a fresh daily low during the early North American session and currently trade just above the mid-134.00s, down over 0.50% for the day.

The US Dollar (USD) weakened across the board after the US Bureau of Labor Statistics reported that inflation in the US, as measured by the Consumer Price Index (CPI) rose 0.4% in April and the yearly rate eased to 4.9% from 5%. Meanwhile, the Core CPI, which excludes volatile food and energy prices, matched expectations, coming in at 0.4% and 5.5%, respectively, Nevertheless, the data reaffirms market bets for an imminent pause in the Federal Reserve’s (Fed) year-long rate-hiking cycle, which weighs heavily on the Greenback and exerts downward pressure on the USD/JPY pair.

However, the Bank of Japan’s (BoJ) dovish stance, along with a generally positive tone around the equity markets, could undermine the safe-haven Japanese Yen (JPY) and help limit losses for the USD/JPY pair. It is worth recalling that BoJ Governor Kazuo Ueda, speaking in parliament earlier today, said that it was too early to discuss specific plans for an exit from the massive stimulus programme. This, in turn, might hold back bearish traders from placing aggressive bets and act as a tailwind for spot prices, making it prudent to wait for strong follow-through selling before positioning for further losses.

Technical Levels: Supports and Resistances

USDJPY currently trading at 135.32 at the time of writing. Pair opened at 135.19 and is trading with a change of 0.1 % .

The pair is trading above its 20 Daily moving average @ 134.56, above its 50 Daily moving average @ 133.84 , above its 100 Daily moving average @ 132.85 and below its 200 Daily moving average @ 137.02

The previous day high was 135.36 while the previous day low was 134.72. The daily 38.2% Fib levels comes at 135.12, expected to provide resistance. Similarly, the daily 61.8% fib level is at 134.97, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 134.82, 134.45, 134.18
• Pivot resistance is noted at 135.46, 135.73, 136.1

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