USD/JPY: Correction from six-week highs stalls near 132.50, US data eyed

USD/JPY is in the red for the first time this week, back below the 133.00 level.
US Dollar benefits from risk aversion but US Treasury yields remain a drag.
Bearish 50DMA support is in sight amid the pullback from multi-week highs.

Dhwani Mehta FXStreet

USD/JPY is on a corrective downside journey so far this Wednesday, witnessing losses for the first time this week. The pair is retreating from fresh six-week highs of 133.31 reached a day before, trading under 133.00 amid broad risk aversion.

Hotter-than-expected US Consumer Price Index (CPI) data combined with hawkish commentary from US Federal Reserve (Fed) officials have spooked investors, negatively impacting global stocks. The rush to safety in the US bond market is sending the US Treasury bond yields lower, in turn, weighing down on the USD/JPY pair.

Further, expectations that the new Bank of Japan (BoJ) Governor Kazuo Ueda could likely abandon the central bank’s yield curve policy are lending support to the Japanese Yen.

However, the renewed demand for the US Dollar, amid dominating risk-off flows, is fuelling the latest uptick in the spot. All eyes now turn toward the US Retail Sales data due later in the NA session for fresh trading impetus.

From a short-term technical perspective, USD/JPY is reattempting the 133.00 level, having found support near the 132.50 psychological level.

The 14-day Relative Strength Index (RSI) is edging higher above the midline, suggesting that the recovery momentum remains well in place.

Buyers need to take out the six-week high at 133.31 to extend the recent uptrend toward the static resistance at 133.50.

On the flip side, a sustained move below the 132.50 demand area will put the 50-Daily Moving Average (DMA) support at 132.03 under threat.

USD/JPY: Daily chart

USD/JPY: Additional technical levels

USD/JPY

Overview
Today last price	132.91
Today Daily Change	-0.13
Today Daily Change %	-0.10
Today daily open	133.04

Trends
Daily SMA20	130.51
Daily SMA50	132.1
Daily SMA100	137.96
Daily SMA200	136.85

Levels
Previous Daily High	133.32
Previous Daily Low	131.5
Previous Weekly High	132.91
Previous Weekly Low	129.81
Previous Monthly High	134.78
Previous Monthly Low	127.22
Daily Fibonacci 38.2%	132.62
Daily Fibonacci 61.8%	132.19
Daily Pivot Point S1	131.92
Daily Pivot Point S2	130.8
Daily Pivot Point S3	130.11
Daily Pivot Point R1	133.74
Daily Pivot Point R2	134.43
Daily Pivot Point R3	135.55

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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