• US dollar posts mixt results on Friday ahead of Fed’s week.
  • Risk aversion and lower US yields weigh on USD/JPY.
  • Pair drops for the second week in a row, next support at 113.50.

After a short-lived recovery, the USD/JPY resumed the downside and dropped to 113.59, reaching a fresh one-week low. It is hovering around 113.70, consolidating weekly losses and on its way to the lowest daily close in a month.

USD/JPY extends slide despite Fed’s expected hikes

The combination of risk aversion across financial markets and lower US yields weighed on the USD/JPY during the week. Momentarily it traded above 115.00 on Tuesday, and then resumed the downside.

If the slide continues, the next key level for USD/JPY is the 113.50 area (last week lows) and then 113.20. The negative momentum for the US dollar could be alleviate with a firm recovery above 114.70.

The key event next week is the FOMC meeting. No change in interest rate is expected on Wednesday but a clear sign of a March hike is seen. “A likely March rate hike has been well communicated, so a "prepare for liftoff" signal will not be market-moving. More important will be guidance on QT as well as the funds rate after March. We don’t expect definitive signals, unfortunately; the next dot plot update is in March. The result could be mixed messages”, warn analysts at TD Securities.

Technical levels

USD/JPY

Overview
Today last price 113.66
Today Daily Change -0.54
Today Daily Change % -0.47
Today daily open 114.2
 
Trends
Daily SMA20 114.97
Daily SMA50 114.33
Daily SMA100 113.2
Daily SMA200 111.45
 
Levels
Previous Daily High 114.55
Previous Daily Low 113.96
Previous Weekly High 115.85
Previous Weekly Low 113.48
Previous Monthly High 115.21
Previous Monthly Low 112.56
Daily Fibonacci 38.2% 114.19
Daily Fibonacci 61.8% 114.32
Daily Pivot Point S1 113.93
Daily Pivot Point S2 113.65
Daily Pivot Point S3 113.34
Daily Pivot Point R1 114.51
Daily Pivot Point R2 114.82
Daily Pivot Point R3 115.1

 

 

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