USD/JPY flirts with daily low, around 143.00 mark amid chances of BoJ intervention

USD/JPY meets with a fresh supply and retreats sharply from the 145.00 neighbourhood.
Jawboning by Japanese authorities points to an imminent intervention and boosts the JPY.
The emergence of some selling around the USD also contributes to the intraday downfall.

Haresh Menghani FXStreet

The USD/JPY pair faces rejection near the 145.00 psychological mark and retreats from the vicinity of a 24-year high retested earlier this Wednesday. The downward trajectory extends through the first half of the European session, though the pair manages to rebound a few pips from the daily low and is currently placed just above the 143.00 mark.

A combination of factors fails to assist the USD/JPY pair to capitalize on the previous day's post-US CPI surge of over 300 pips. The Japanese yen strengthens across the board amid jawboning by Japanese officials and chances that the Bank of Japan (BoJ) may step in to arrest a freefall in the domestic currency. This, along with the emergence of some US dollar selling, exerts downward pressure on the major.

That said, a recovery in the global risk sentiment - as depicted by a generally positive tone around the equity markets - could cap gains for the safe-haven JPY. Apart from this, a big divergence in the monetary policy stance adopted by the Japanese central bank and the Federal Reserve supports prospects for the emergence of some dip-buying around the USD/JPY pair. The BoJ remains committed to continuing with its monetary easing.

In contrast, the US central bank is expected to keep raising interest rates at a faster pace to tame inflation. The bets were reaffirmed by the stronger US CPI report on Tuesday. The markets quickly started pricing in the possibility of a full 1% rate hike at the next FOMC meeting on September 20-21. This is evident from a fresh leg up in the US Treasury bond yields, which favours the USD bulls and should lend support to the USD/JPY pair.

Nevertheless, the fundamental backdrop remains tilted firmly in favour of bullish traders. Hence, any subsequent decline could still be seen as a buying opportunity and remain limited. Market participants now look forward to the US Producer Price Index (PPI), due for release later during the early North American session. Apart from this, the US bond yields and the broader risk sentiment should provide some impetus to the USD/JPY pair.

Technical levels to watch

USD/JPY

Overview
Today last price	143.16
Today Daily Change	-1.43
Today Daily Change %	-0.99
Today daily open	144.59

Trends
Daily SMA20	139.58
Daily SMA50	137.16
Daily SMA100	134.38
Daily SMA200	126.02

Levels
Previous Daily High	144.69
Previous Daily Low	141.66
Previous Weekly High	144.99
Previous Weekly Low	140.12
Previous Monthly High	139.08
Previous Monthly Low	130.4
Daily Fibonacci 38.2%	143.53
Daily Fibonacci 61.8%	142.82
Daily Pivot Point S1	142.6
Daily Pivot Point S2	140.62
Daily Pivot Point S3	139.58
Daily Pivot Point R1	145.63
Daily Pivot Point R2	146.67
Daily Pivot Point R3	148.66

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

GBP/USD stays slightly offered below 1.3600

Following an initial drop to fresh six-day lows, GBP/USD now picks up some updside traction and trades in levels just shy of the 1.3600 barrier on Thursday. The generalised cautious tone among market participants continue to underpin the Greenback ahead of Friday’s data releases and the Fed Warsh’s speech.

EUR/USD struggles for direction around 1.1650

EUR/USD gyrates around the 1.1650 region amid the absence of clear direction and following an earlier drop to the 1.630 area. The pair’s vacillating mood comes in response to the equally irresolute price action in the US Dollar as investors warm up for the release of the NFP Annual Revision and the speech by the Fed’s Warsh at the Jackson Hole Symposium, both events due on Friday.

Gold recovers $4,600, buyers unwilling to give up

Gold adds to Wednesday’s pullback, although it manages to pick up some pace and come closer to the $4,600 mark per troy ounce on Thursday. In the meantime, the yellow metal remains on the back foot despite the widespread caution and the lack of clear direction of the US Dollar.

Ripple rebounds as whales accumulate 460 million XRP

Ripple (XRP) holds above $1.40 support on Wednesday, as bulls return to take control following three consecutive days of declines. The remittance token’s upside appears capped at $1.50 while extended gains would face additional resistance at $1.70. A break above $2.00 would mark a potential regime shift from bearish to bullish.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.

Kevin Warsh’s Jackson Hole dilemma: Say too much, too little, or just enough

Kevin Warsh is preparing to deliver his first Jackson Hole speech as Federal Reserve (Fed) Chair on Friday, and expectations extend well beyond whether interest rates will be raised or left unchanged in September.