USD/JPY is steady below 147.45 resistance ahead of the US ADP report
- The Dollar remains moderately bid, ready to test resistance at 147.50.
- Dovish comments from BoJ’s Himino are weighing on the Yen.
- The US ADP later today is likely to determine USD’s near-term path.
The US Dollar keeps a mild bid tone on the Early European trading session, with the pair trading within a narrow range below the 147.45 resistance area and bears contained above 147.00 so far.
The Dollar ticks up on higher US yields and a dovish BoJ
A mild pick up on US Treasury yields and some dovish comments from the BoJ Deputy Governor Himino, cooling expectations about a hawkish turn on the bank’s monetary policy, have increased bearish pressure on the Yen.
The US Dollar however is facing weaknesses of its own. US JOLTs data revealed on Tuesday that the effect of higher rates is starting to spill over the labour market, boosting speculation that the Fed might start cutting rates in early 2024.
If the ADP later today confirms this theory, we might see further USD selling later today.
The technical picture, however, is showing signs of a potential rebound. Four-hour charts show the pair testing the top of a falling wedge pattern right below 147.45, with a bullish divergence on the RSI giving hopes for buyers.
Resistances are 147.50 and 148.50. Supports lie at 146.30 and 146.00.
Technical levels to watch
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
