USD/JPY Price Analysis: Record minimal losses but clings around 127.70s on falling US T-bond yields


  • The USD/JPY loses for the second straight week, 1.10%.
  • The greenback remained strong in the session, boosted by a dampened market mood, as US equities reached fresh 52-week lows.
  • USD/JPY Price Forecast: Range-bound lacking a catalyst that can rock the boat.

The USD/JPY continues sliding for the third straight day, though the downtrend capped at April’s 27 daily low at 126.94, keeping the major’s uptrend intact amidst a downbeat market mood on the last trading day of the week, as the Wall Street close looms. At 127.82, the USD/JPY records minimal gains of 0.04%.

US equities are plunging between 1.51% and 2.49%. The Dow Jones and the Nasdaq reached a 52-week low, despite efforts from the People Bank of China (PBoC) to stimulate the Chinese economy when it cut rates in the 5-year Loan Prime Rate (LPR) by 0.15%. Although the decision was cheered by investors in the Asian and European sessions, it was ignored in the New York session, as options expiring tied to equities and ETFs increased volatility.

In the meantime, the US Dollar Index, a measurement of the greenback’s value against its peers, recovers some 0.23% in the day and sits at 103.102. Contrarily, US Treasury yields, led by the 10-year benchmark note, is down from a 3% high in the week to 2.774%, a headwind for the USD/JPY due to its tight positive correlation.

USD/JPY Price Forecast: Technical outlook

USD/JPY’s price action pushed the exchange rate towards the Bollinger’s band bottom line, at around 127.12, where some USD/JPY buyers lifted the price towards current price levels. It is worth noting that the USD/JPY shifted from upward biased to neutral due to the major staying trading in the 127.00-129.78 range, unable to trade beyond those boundaries, amid a lack of a fresh impetus that could rock the pair towards new weekly/yearly lows/highs, respectively.

Upwards, the USD/JPY first resistance would be 128.00. A breach of the latter would expose essential resistance levels. Firstly, May’s 18 daily high at 129.53, followed by the 130.00 mark, and the YTD high at 131.34. On the flip side, the USD/JPY’s first support would be May 19 daily low at 127.02. Break below would expose April’s 27 swing low at 126.94, followed by the 50-DMA at 125.66.

Key  Technical Levels

USD/JPY

Overview
Today last price 127.82
Today Daily Change -0.07
Today Daily Change % -0.05
Today daily open 127.8
 
Trends
Daily SMA20 129.3
Daily SMA50 125.48
Daily SMA100 120.29
Daily SMA200 116.35
 
Levels
Previous Daily High 128.94
Previous Daily Low 127.02
Previous Weekly High 131.35
Previous Weekly Low 127.52
Previous Monthly High 131.26
Previous Monthly Low 121.67
Daily Fibonacci 38.2% 127.76
Daily Fibonacci 61.8% 128.21
Daily Pivot Point S1 126.9
Daily Pivot Point S2 126
Daily Pivot Point S3 124.98
Daily Pivot Point R1 128.82
Daily Pivot Point R2 129.84
Daily Pivot Point R3 130.74

 

 

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