USD/JPY remains depressed below 133.00 amid quiet trading

USD/JPY is treading listlessly amid a quiet start to the holiday-shortened week.
US Dollar drops with Treasury bond yields amid China-led risk-on mood.
USD/JPY bulls need acceptance above 133.00 to resume the recovery.

Dhwani Mehta FXStreet

USD/JPY is trading on the defensive heading into the early European morning, as the Japanese yen traders take it easy after a volatile last week.

The downbeat tone around the pair could be partly due to a broad-based US Dollar weakness, fuelled by persisting risk flows and lower US Treasury bond yields. Reports that China is planning to scrap the quarantine rules for inbound travelers alongside further relaxation of restrictions boosted risk sentiment, weighing negatively on the safe-haven US Dollar.

Light trading following the Christmas holiday weekend also left the USD/JPY pair gyrating in a narrow range below the 133.00 level so far. Markets refrain to place any fresh directional bets on the Japanese yen after the previous week’s surprise yield curve revision by the Bank of Japan (BoJ). The BoJ’s move caught markets off-guard and triggered a fresh sell-off in bonds and stocks globally before a ‘Santa rally’ kicked in the second of the week, helping calm market nerves.

The pair will take cues from risk trends for any moves, as the US data docket remains relatively light amid a holiday-shortened week.

From a short-term technical perspective, USD/JPY is failing to find acceptance above the 133.00 level, threatening recovery attempts.

A sustained move above the latter is needed to extend the corrective upside toward the 133.50 psychological mark.

However, the bearish 21-Daily Moving Average (DMA) cut the mildly bullish 200DMA from above, validating a bear cross on Friday.

The 14-day Relative Strength Index (RSI) is sitting just above the oversold territory, backing the bearish potential.

Friday’s low at 132.15 is the next downside target for sellers, below which the December 22 low at 131.64 could be retested.

USD/JPY: Daily chart

USD/JPY: Additional technical levels

USD/JPY

Overview
Today last price	132.80
Today Daily Change	-0.13
Today Daily Change %	-0.10
Today daily open	132.92

Trends
Daily SMA20	135.62
Daily SMA50	140.86
Daily SMA100	141.12
Daily SMA200	136

Levels
Previous Daily High	132.92
Previous Daily Low	132.92
Previous Weekly High	137.48
Previous Weekly Low	130.57
Previous Monthly High	148.82
Previous Monthly Low	137.5
Daily Fibonacci 38.2%	132.92
Daily Fibonacci 61.8%	132.92
Daily Pivot Point S1	132.92
Daily Pivot Point S2	132.92
Daily Pivot Point S3	132.92
Daily Pivot Point R1	132.92
Daily Pivot Point R2	132.92
Daily Pivot Point R3	132.92

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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