USD/JPY rebounds from monthly low, climbs to mid-142.00s amid reviving USD demand

USD/JPY kicks off the new week on a positive note and draws support from a modest USD strength.
Bets for July Fed rate hike remain supportive of elevated US bond yields and lend support to the buck.
Japan intervention fears to cap any meaningful gains for the pair ahead of the US CPI on Wednesday.

Haresh Menghani FXStreet

The USD/JPY pair attracts some buyers near the 142.00 round figure during the Asian session on Monday and recovers a part of Friday's heavy losses to its over a one-week low. Spot prices currently trade just below the 142.50 area, up nearly 0.30% for the day.

The US Dollar (USD) kicks off the new week on a positive note and for now, seems to have snapped a two-day losing streak to its lowest level since June 2022 touched on Friday, which, in turn, is seen lending some support to the USD/JPY pair. Firming expectations that the Federal Reserve (Fed) will hike interest rates by 25 bps later this month remains supportive of elevated US Treasury bond yields and acts as a tailwind for the USD. That said, reduced bets for any further lift-off after the one expected in July might hold back traders from placing aggressive bets around the USD.

The US NFP report released on Friday showed that the economy added the fewest jobs in 2-1/2 years in June and suggested that labor market conditions were finally easing. This, along with signs that the inflation is gradually slowing, fueled speculations that the Fed will eventually soften its hawkish stance, sooner rather than latter. Apart from this, speculations that Japan might intervene in currency markets to prop up the Japanese Yen might further contribute to capping the upside for the USD/JPY pair and warrant caution before positioning for any further appreciating move.

Moreover, tradres might also prefer to move to the sidelines ahead of this week's release of the latest US consumer inflation figures, due on Wednesday, which is expected to show that the headline CPI is expected to decelerate further in June. Any positive surprise, however, might prompt aggressive short-covering around the USD and suggest that the USD/JPY pair's recent corrective decline from the YTD top has run its course. Heading into the key data risk, the fundamental backdrop makes it prudent to wait for some follow-through buying before placing fresh bullish bets.

Technical levels to watch

USD/JPY

Overview
Today last price	142.43
Today Daily Change	0.28
Today Daily Change %	0.20
Today daily open	142.15

Trends
Daily SMA20	142.77
Daily SMA50	139.76
Daily SMA100	136.8
Daily SMA200	137.22

Levels
Previous Daily High	144.2
Previous Daily Low	142.07
Previous Weekly High	144.91
Previous Weekly Low	142.07
Previous Monthly High	145.07
Previous Monthly Low	138.43
Daily Fibonacci 38.2%	142.89
Daily Fibonacci 61.8%	143.39
Daily Pivot Point S1	141.41
Daily Pivot Point S2	140.68
Daily Pivot Point S3	139.28
Daily Pivot Point R1	143.54
Daily Pivot Point R2	144.93
Daily Pivot Point R3	145.67

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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