- USD/JPY gains positive traction for the second straight day and inches closer to the weekly high.
- The widening US-Japan yields differential, and the risk-on impulse undermine the safe-haven JPY.
- Bulls facing tough resistance from the 50-day SMA at 134.60, should await clean break before placing fresh bets.
The USD/JPY pair catches fresh bids near the 132.30-132.25 region and steadily climbs back closer to the weekly high set earlier this Wednesday. The pair is currently trading around the 133.65-133.70 area, up nearly 0.40% for the day and is supported by a combination of factors.
A further rise in the US Treasury bond yields, bolstered by the overnight hawkish remarks by several Fed officials, widens the US-Japan rate differential. This, along with the risk-on impulse, undermines the safe-haven Japanese yen and pushes the USD/JPY higher for the second successive day.
Looking at the broader picture, the post-FOMC sharp downfall stalled on Tuesday near the 130.40-130.35 confluence support. The mentioned area comprises the 100-day SMA and the 50% Fibonacci retracement level of the April-July rally, which should now act as a pivotal point for the USD/JPY pair.
Bullish traders, meanwhile, struggled to make much headway above 134.00 after meeting tough resistance at the 50-day SMA at 134.60. If they break above the 135.00 psychological mark is the next hurdle, en route to the 23.6% Fibo. level, around the 135.00 region.
On the flip side, the 38.2% Fibo. level, around the 132.50 area, now seems to protect the immediate downside ahead of the 132.00 round figure and the 131.65-131.60 region. Failure to defend the said support levels could make the USD/JPY pair vulnerable to sliding back below the 131.00 mark.
The downward trajectory could further get extended towards the 130.40-130.35 confluence support. A convincing break below the latter would be seen as a fresh trigger for bears and set the stage for an extension of the recent corrective slide from the 24-year peak touched on July 14.
USD/JPY daily chart
Key levels to watch
|Today last price||133.66|
|Today Daily Change||0.48|
|Today Daily Change %||0.36|
|Today daily open||133.18|
|Previous Daily High||133.19|
|Previous Daily Low||130.4|
|Previous Weekly High||137.46|
|Previous Weekly Low||132.5|
|Previous Monthly High||139.39|
|Previous Monthly Low||132.5|
|Daily Fibonacci 38.2%||132.12|
|Daily Fibonacci 61.8%||131.46|
|Daily Pivot Point S1||131.32|
|Daily Pivot Point S2||129.46|
|Daily Pivot Point S3||128.53|
|Daily Pivot Point R1||134.11|
|Daily Pivot Point R2||135.05|
|Daily Pivot Point R3||136.91|
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