#USDJPY @ 140.259 retreats from a fresh YTD peak touched this Tuesday amid a modest USD downtick. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for FREE REGISTER 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_level1)]

• USD/JPY retreats from a fresh YTD peak touched this Tuesday amid a modest USD downtick.
• The Fed-BoJ policy divergence and the US debt ceiling optimism act as a tailwind for the pair.
• The fundamental backdrop still supports prospects for a further near-term appreciating move.

The pair currently trades last at 140.259.

The previous day high was 140.92 while the previous day low was 140.11. The daily 38.2% Fib levels comes at 140.42, expected to provide resistance. Similarly, the daily 61.8% fib level is at 140.61, expected to provide resistance.

The USD/JPY pair pulls back from a six-month high touched earlier this Tuesday and turns lower for the second successive day. Spot prices slide below the mid-140.00s during the first half of the European session, though any meaningful corrective pullback still seems elusive.

The US Dollar (USD) bulls opt to take some profits off the table following the recent runup to over a two-month high amid retreating US Treasury bond yields. This, along with a slightly overbought Relative Strength Index (RSI) on the daily chart, prompts some long-unwinding trade around the USD/JPY pair. The USD downside, however, remains cushioned amid expectations that the Federal Reserve (Fed) will keep interest rates higher for longer.

In fact, the current market pricing indicates a greater chance of another 25 bps lift-off at the next FOMC monetary policy meeting in June. The bets were reaffirmed by the recent hawkish remarks by a slew of influential Fed officials and the US Core PCE Price Index released on Friday, which pointed to sticky inflation. This should act as a tailwind for the USD and supports prospects for the emergence of some dip-buying around the USD/JPY pair.

The Bank of Japan Governor Kazuo Ueda, meanwhile, had said that the central bank will continue easing with yield curve control. Adding to this, the Tokyo CPI released last Friday showed that inflation in Japan’s capital city eased more than expected in May. This validates the BoJ’s view that inflation in Japan is likely to slow back below the 2% target in the middle of the current fiscal year and allow the central bank to stick to its dovish stance.

This, along with a positive risk tone, could undermine the safe-haven Japanese Yen (JPY) and contribute to limiting losses for the USD/JPY pair. US lawmakers signalled that they have reached a tentative agreement to suspend the US government’s $31.4 trillion debt ceiling till January 25 and avert an unprecedented default by the world’s largest economy. This, in turn, boosts investors’ confidence, which is evident from the upbeat mood around the equity markets and is seen driving flows away from traditional safe-haven assets, including the JPY.

The aforementioned fundamental backdrop suggests that the path of least resistance for the USD/JPY pair is to the upside. Hence, any meaningful pullback might still be seen as a buying opportunity and is more likely to remain cushioned. Traders now look to the Conference Board’s US Consumer Confidence Index for short-term opportunities later during the early North American session.

Technical Levels: Supports and Resistances

USDJPY currently trading at 140.24 at the time of writing. Pair opened at 140.46 and is trading with a change of -0.16 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 136.99, 50 SMA 134.67, 100 SMA @ 133.6 and 200 SMA @ 137.24.

The previous day high was 140.92 while the previous day low was 140.11. The daily 38.2% Fib levels comes at 140.42, expected to provide resistance. Similarly, the daily 61.8% fib level is at 140.61, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 140.08, 139.69, 139.27
• Pivot resistance is noted at 140.88, 141.3, 141.69

[/s2If]
Nehcap Expert Advisor
The NEHCAP MT4 EA is high quality professional trading system geared to generate returns without using GRID or martingales. Each trade has strict risk per trade parameter. The pairs under management include EURUSD, GBPUSD, AUDCAD, AUDNZD,GBPAUD, EURAUD, EURCAD, CHFJPY and many more.
The system is trading live: LIVE ACCOUNT TRACKING
You can run it free. Apply for a free trial and track our account. Buy the system or use profit share mechanism to generate returns on your MT4.
Join Our Telegram Group