• USD/JPY lacked any firm directional bias and consolidated its recent gains to a multi-day high.
  • Recession fears benefitted the safe-haven JPY and capped gains amid sliding US bond yields.
  • Modest USD strength acted as a tailwind as the focus remains on Fed Chair Powell’s speech.

The USD/JPY pair oscillated in a narrow trading range on Wednesday and consolidated its recent gains recorded over the past three sessions. Spot prices moved back above the 136.00 mark during the early European session, with bulls eyeing a multi-day peak touched the previous day.

The US dollar built on the overnight strong move up and gained some follow-through traction during the early part of trading on Wednesday. This, along with the divergent monetary policy stance adopted by the Bank of Japan and the Federal Reserve, acted as a tailwind for the USD/JPY pair. That said, a combination of factors held back bulls from placing aggressive bets and kept a lid on any meaningful upside for spot prices.

The market sentiment remains fragile amid concerns that a more aggressive move by major central banks to curb soaring inflation would pose challenges to the global economic recovery. This, in turn, offered support to the safe-haven Japanese yen. The flight to safety triggered a fresh leg down in the US Treasury bond yields, which narrowed the US-Japan rate differential and further collaborated to capping gains for the USD/JPY pair.

Traders also seemed reluctant and preferred to move on the sidelines ahead of Fed Chair Jerome Powell's speech at the ECB forum in Sintra, due later during the North American session. Investors will look for fresh clues about the Fed's policy tightening path, which will play a key role in influencing the near-term USD price dynamics. This, in turn, will help investors to determine the next leg of a directional move for the USD/JPY pair.

Technical levels to watch

USD/JPY

Overview
Today last price 136.17
Today Daily Change 0.05
Today Daily Change % 0.04
Today daily open 136.12
 
Trends
Daily SMA20 133.95
Daily SMA50 130.83
Daily SMA100 125.11
Daily SMA200 119.48
 
Levels
Previous Daily High 136.38
Previous Daily Low 135.11
Previous Weekly High 136.72
Previous Weekly Low 134.26
Previous Monthly High 131.35
Previous Monthly Low 126.36
Daily Fibonacci 38.2% 135.9
Daily Fibonacci 61.8% 135.6
Daily Pivot Point S1 135.36
Daily Pivot Point S2 134.6
Daily Pivot Point S3 134.09
Daily Pivot Point R1 136.63
Daily Pivot Point R2 137.14
Daily Pivot Point R3 137.9

 

 

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