USD/JPY recovers above 109.30 ahead of US data

USD/JPY fluctuates in a tight range following Monday's decline.
US Dollar Index extends rebound beyond 92.70 ahead of American session.
Focus shifts to Retail Sales and Industrial Production data from US.

Eren Sengezer FXStreet

After closing the first day of the week deep in the negative territory, the USD/JPY pair struggled to gain traction during the Asian trading hours. With the greenback regathering its strength in the European session, however, the pair managed to stage a rebound and was last seen rising 0.09% on the day at 109.32.

DXY continues to edge higher

On Monday, the sharp decline witnessed in the US Treasury bond yields weighed heavily on USD/JPY. Although the benchmark 10-year US T-bond yield remains on the back foot and loses more than 3%, the pair's downside stays limited with the USD outperforming its major rivals.

The US Dollar Index, which managed to register small gains on Monday, is currently rising 0.12% on the day at 92.72. In the meantime, Wall Street's main indexes look to open lower for the second straight day with US stocks futures indexes losing between 0.35% and 0.55%. In case risk-off flows continue to dominate the financial markets in the second half of the day, the pair is likely to have a tough time pushing higher.

Earlier in the day, Japan announced on Tuesday that it has extended the state of emergency measures until September 12 with seven more prefectures being included.

Later in the day, July Retail Sales and Industrial Production data from the US will be looked upon for fresh impetus.

Technical levels to watch for

USD/JPY

Overview
Today last price	109.31
Today Daily Change	0.09
Today Daily Change %	0.08
Today daily open	109.22

Trends
Daily SMA20	109.92
Daily SMA50	110.17
Daily SMA100	109.69
Daily SMA200	107.44

Levels
Previous Daily High	109.75
Previous Daily Low	109.12
Previous Weekly High	110.8
Previous Weekly Low	109.55
Previous Monthly High	111.66
Previous Monthly Low	109.06
Daily Fibonacci 38.2%	109.36
Daily Fibonacci 61.8%	109.51
Daily Pivot Point S1	108.97
Daily Pivot Point S2	108.72
Daily Pivot Point S3	108.34
Daily Pivot Point R1	109.61
Daily Pivot Point R2	110
Daily Pivot Point R3	110.25

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

AUD/USD flirts with 0.7000, lowest since early August amid bullish USD

AUD/USD hits a fresh low since early August during the Asian session on Friday and looks vulnerable near 0.7000 after breaking below the 200-day SMA overnight. Against the backdrop of the hawkish Fed, a two-day rally in oil prices revives inflation fears and continues to push US bond yields to multi-year highs. Adding to this, geopolitical risks lift the US Dollar to a two-month high, overshadowing RBA rate hike bets and weighing on the pair.

USD/JPY pulls back from three-week high after failing near 159.00

USD/JPY edges lower during the Asian session on Friday, stalling its recent strong move to a three-week high of 159.00 as Japanese Yen bears turn cautious amid intervention fears. Meanwhile, the US Dollar retains a strong bullish undertone as the Fed's hawkish outlook and oil-driven inflation fears continue to push US bond yields to multi-year peaks. Furthermore, the BoJ's dovish rate hike last week might cap JPY and support spot prices.

Gold treads water below $4,300

Gold grabs some buying attention and advances marginally at the end of the week, partially retracing the weekly decline, although it is still navigating below the key $4,300 mark per troy ounce. The fresh selling bias on the Greenback and the modest decline in US Treasury yields appear to support the humble advance in the precious metal.

Week ahead: Rate hike bets face a crucial data week

Despite the solid drop from the mid-September high, oil prices remained in the driver’s seat for another week, setting the tone in financial markets. Six months have passed since the late-February start of the US-Iran conflict, and there is still no breakthrough in the stalled talks, despite pressure from regional leaders and the rest of the world.

CFTC Report: Defensive currency positioning takes hold

The week in one sentence: Sterling and Euro shorts deepened in the week to September 22, while Yen longs were cut sharply. Oil positioning improved despite a steep price decline, and Gold exposure remained crowded. The main signal was a more defensive currency positioning backdrop.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Fed and the BoJ have just done something remarkably similar. Both central banks raised interest rates by 25 bps last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.