USD/JPY sticks to modest gains above 135.00, lacks bullish conviction ahead of US data

USD/JPY gains some positive traction and snaps a five-day losing streak to a multi-month low.
A modest USD recovery from over a five-month low is seen as a key factor offering support.
Expectations for smaller Fed rate hikes hold back the USD bulls from placing aggressive bets.
Traders now look forward to the release of the US ISM Services PMI for short-term impetus.

Haresh Menghani FXStreet

The USD/JPY pair attracts some buyers near the 134.15-134.10 area on Monday and snaps a five-day losing streak to its lowest level since August 16. Spot prices, however, retreat a few pips from the daily top and slide back closer to the 135.00 psychological mark heading into the North American session.

The US Dollar stages a modest recovery from over a five-month low touched earlier today and turns out to be a key factor acting as a tailwind for the USD/JPY pair. The upbeat US monthly jobs report released on Friday, including an upside surprise in wages, reaffirmed expectations that the Federal Reserve will continue to hike interest rates in coming months. This, in turn, helps ease the recent bearish pressure surrounding the Greenback amid extremely oversold conditions.

Apart from this, the optimism over the easing of COVID-19 restrictions in China undermines the safe-haven Japanese Yen and further offers support to the USD/JPY pair. That said, expectations that the US central bank will begin to slow the pace of its policy tightening as soon as in the December meeting is holding back the USD bulls from placing aggressive bets. Furthermore, a weaker risk tone helps limit losses for the safe-haven JPY and seems to cap the major.

The market sentiment remains fragile amid growing worries about a deeper global economic downturn. This, in turn, warrants some caution before confirming that the USD/JPY pair has formed a near-term bottom and positioning for any meaningful recovery. Even from a technical perspective, Friday's break below the very important 200-day SMA for the first time since February 2021 supports prospects for an extension of the recent sharp pullback from a 32-year peak.

Hence, any subsequent positive move might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly. Traders now look forward to the release of the US ISM Services PMI. Apart from this, the US bond yields will influence the USD price dynamics and provide some impetus to the USD/JPY pair. This, along with the broader risk sentiment, might further contribute to producing short-term trading opportunities around the major.

Technical levels to watch

USD/JPY

Overview
Today last price	135.18
Today Daily Change	0.87
Today Daily Change %	0.65
Today daily open	134.31

Trends
Daily SMA20	140.16
Daily SMA50	144.14
Daily SMA100	141.14
Daily SMA200	134.51

Levels
Previous Daily High	135.98
Previous Daily Low	133.62
Previous Weekly High	139.9
Previous Weekly Low	133.62
Previous Monthly High	148.82
Previous Monthly Low	137.5
Daily Fibonacci 38.2%	134.52
Daily Fibonacci 61.8%	135.08
Daily Pivot Point S1	133.29
Daily Pivot Point S2	132.28
Daily Pivot Point S3	130.93
Daily Pivot Point R1	135.65
Daily Pivot Point R2	137
Daily Pivot Point R3	138.01

Author

Haresh Menghani

FXStreet

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

EUR/USD climbs to daily highs near 1.1820

EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.

GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Breaking: US and Israel attack Iran, risk aversion to sweep global markets

Early Saturday, United States (US) President Donald Trump announced that the US had begun “major combat operations” in Iran, following Israel’s pre-emptive missile attacks against Tehran.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.