• USD/JPY picks up bids after two-day downtrend, remains sluggish of late.
  • Cautious mood ahead of crucial data/events restrict the Yen pair’s immediate moves.
  • Optimism surrounding China contrasts with hawkish hopes from Fed’s Powell to challenge traders.
  • US ADP Employment Change, second readings of US Q3 GDP will also be necessary for immediate directions.

USD/JPY remains sidelined around 138.80, despite picking up bids to snap a two-day uptrend during early Wednesday morning in Tokyo. In doing so, the Yen pair portrays the market’s cautious mood ahead of the key catalysts while tracking sluggish US Treasury bond yields.

While portraying the mood, S&P 500 Futures print mild losses after a mixed closing of Wall Street, whereas the US 10-year Treasury bond yields ended Tuesday on a firmer footing, up six basis points (bps) to 3.748%, remain sidelined near the same at the latest. The two-year US Treasury bond yields stopped the previous day’s run-up near 4.48%.

Talking about the market’s positives, China announced multiple measures to ease the strict lockdown in the key areas after witnessing a retreat in the daily Covid infections from a record high. Even so, the world’s second-largest economy kept its Zero-Covid policy intact. Bloomberg reported the reopening of some city buildings in the greater Zhengzhou region, the home of an essential iPhone plant. Earlier on Tuesday, the news broke that China's Guangdong province will allow the close contacts of Covid cases to quarantine at home.

On the same line could be the softer US data as Conference Board (CB) Consumer Confidence Index dropped to 100.2 in November versus 102.2 prior (revised down from 102.5).

However, hawkish comments supporting the US Federal Reserve’s steadily high-interest rates, even if a mild increase in aggression is expected, seemed to have kept the US Dollar Index (DXY) on a firmer footing. New York Federal Reserve Bank President John Williams and St. Louis Fed President James "Jim" Bullard were the latest supporters of higher rates.

It should be noted that the looming concerns over the Bank of Japan’s (BOJ) monetary policy tightening in 2023 appeared to have favored the USD/JPY bears of late.

Looking forward, risk catalysts like headlines from China and Fedspeak, as well as chatters surrounding the BOJ, may direct immediate USD/JPY moves. However major attention will be given to Fed Chairman Jerome Powell’s first public appearance since November Federal Open Market Committee (FOMC) meeting amid hawkish hopes. Furthermore, the US ADP Employment Change for November, expected to be 200K versus 239K prior, will precede the second reading of the US Gross Domestic Product (GDP) for the third quarter (Q3), expected to confirm 2.6% Annualized growth, to populate the economic calendar too.

Technical analysis

A three-week-old triangle restricts immediate USD/JPY moves between 139.10 and 137.50 by the press time.

Additional important levels

Overview
Today last price 138.72
Today Daily Change -0.07
Today Daily Change % -0.05%
Today daily open 138.79
 
Trends
Daily SMA20 141.91
Daily SMA50 144.58
Daily SMA100 141.21
Daily SMA200 134.2
 
Levels
Previous Daily High 139.35
Previous Daily Low 137.87
Previous Weekly High 142.25
Previous Weekly Low 138.05
Previous Monthly High 151.94
Previous Monthly Low 143.53
Daily Fibonacci 38.2% 138.43
Daily Fibonacci 61.8% 138.79
Daily Pivot Point S1 137.99
Daily Pivot Point S2 137.18
Daily Pivot Point S3 136.5
Daily Pivot Point R1 139.47
Daily Pivot Point R2 140.16
Daily Pivot Point R3 140.96

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD retreats to 1.0850 area as US Dollar rebounds

EUR/USD retreats to 1.0850 area as US Dollar rebounds

EUR/USD has extended its slide toward 1.0850 in the American session. Profit-taking ahead of the weekend and the negative shift witnessed in risk sentiment seems to be helping the US Dollar gather strength against its rivals, weighing on the pair.

EUR/USD News

GBP/USD trades on the back foot below 1.2400

GBP/USD trades on the back foot below 1.2400

GBP/USD is having a difficult time gathering recovery momentum and trading in negative territory below 1.2400 on Friday. Although the data from the US showed that PCE inflation continued to soften in December, the US Dollar holds its ground heading into the weekend.

GBP/USD News

Gold struggles to hold above $1,930

Gold struggles to hold above $1,930

Gold price has lost its traction and declined below $1,930 during the American trading hours. The benchmark 10-year US Treasury bond yield clings to modest daily gains above 3.5% ahead of the weekend, not allowing XAU/USD to gain traction.

Gold News

Is the dramatic rise in whale activity in AAVE, MATIC and DYDX a sell signal?

Is the dramatic rise in whale activity in AAVE, MATIC and DYDX a sell signal?

AAVE, MATIC and DYDX price rallied alongside large market capitalization cryptocurrencies Bitcoin and Ethereum in January. Experts at the crypto intelligence tracker Santiment believe the recent spike in activity by whales on these networks needs to be watched closely.

Read more

Breaking: US annual Core PCE inflation declines to 4.4% in December as expected

Breaking: US annual Core PCE inflation declines to 4.4% in December as expected

Inflation in the US, as measured by the Personal Consumption Expenditures (PCE) Price Index, declined to 5% on a yearly basis in December from 5.5% in November, the US Bureau of Economic Analysis reported on Friday.

Read more

Forex MAJORS

Cryptocurrencies

Signatures