USD/JPY Price Analysis: Flirts with daily low around 136.00, focus shifts to BoJ on Friday


  • USD/JPY comes under heavy selling pressure amid a sharp USD pullback from a multi-month top.
  • The Fed-BoJ policy divergence supports prospects for the emergence of dip-buying at lower levels.
  • The overnight failure to find acceptance above the 200-day SMA warrants some caution for bulls.

The USD/JPY pair meets with a fresh supply on Thursday and extends the previous day's modest pullback from the vicinity of the 138.00 mark, or its highest level since mid-December. The intraday selling picks up pace during the early North American session and momentarily drags spot prices below the 136.00 mark in the last hour.

The US Dollar (USD) bulls opt to take some profits off the table following the recent strong rally to over a three-month peak and turn out to be a key factor exerting pressure on the USD/JPY pair. Apart from this, the downfall could further be attributed to some repositioning trade ahead of the Bank of Japan (BoJ) monetary policy decision, scheduled to be announced during the Asian session on Friday.

The downside for the USD, however, is more likely to remain cushioned amid rising bets for a jumbo 50 bps lift-off at the March FOMC meeting. In contrast, the BoJ is expected to stick to its ultra-easy policy settings to support the fragile domestic economy. The divergent policy stance adopted by the two major central banks supports prospects for the emergence of some dip-buying around the USD/JPY pair.

From a technical perspective, the overnight failure to find acceptance above the very important 200-day Simple Moving Average (SMA) warrants caution for bullish traders. This makes it prudent to wait for a sustained move beyond the overnight swing high, around the 137.90 area, before positioning for any further gains. The USD/JPY pair might then climb to the 138.50 intermediate barrier en route to the 139.00 round figure.

On the flip side, any further decline is more likely to attract fresh buyers near the 135.35 horizontal support zone. That said, a convincing breakthrough, leading to a subsequent weakness below the 135.00 psychological mark, might shift the near-term bias in favour of bearish traders. Spot prices might then accelerate the fall towards the 134.75-134.70 area before eventually dropping to the 134.25 area and the 134.00 round figure.

USD/JPY daily chart

fxsoriginal

Key levels to watch

USD/JPY

Overview
Today last price 136.16
Today Daily Change -1.09
Today Daily Change % -0.79
Today daily open 137.25
 
Trends
Daily SMA20 134.86
Daily SMA50 132.27
Daily SMA100 136.25
Daily SMA200 137.43
 
Levels
Previous Daily High 137.91
Previous Daily Low 136.48
Previous Weekly High 137.1
Previous Weekly Low 135.26
Previous Monthly High 136.92
Previous Monthly Low 128.08
Daily Fibonacci 38.2% 137.37
Daily Fibonacci 61.8% 137.03
Daily Pivot Point S1 136.51
Daily Pivot Point S2 135.78
Daily Pivot Point S3 135.08
Daily Pivot Point R1 137.95
Daily Pivot Point R2 138.64
Daily Pivot Point R3 139.38

 

 

Share: Feed news

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.

Recommended content


Recommended content

Editors’ Picks

EUR/USD stays below 1.0700 ahead of US data

EUR/USD stays below 1.0700 ahead of US data

EUR/USD stays in a consolidation phase slightly below 1.0700 in the European session on Wednesday. Upbeat IFO sentiment data from Germany helps the Euro hold its ground as market focus shifts to US Durable Goods Orders data.

EUR/USD News

USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom

USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom

USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap. 

USD/JPY News

Gold manages to holds above $2,300

Gold manages to holds above $2,300

Gold struggles to stage a rebound following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% ahead of US data, not allowing XAU/USD to gain traction.

Gold News

Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium

Worldcoin looks set for comeback despite Nvidia’s 22% crash

Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.

Read more

Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium

Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out

While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures