USD/JPY struggles near session lows, around 110.75 region on softer US macro data


  • USD/JPY eroded a major part of the overnight gains to the highest level since March 2020.
  • Mixed signals on the US inflation kept the USD bulls on the defensive and exerted pressure.
  • An uptick in the US bond yields might help limit the downside, despite softer US macro data.

The USD/JPY pair maintained its offered tone through the early North American session and was last seen hovering near daily lows, around the 110.80-75 region.

Having struggled to find acceptance above the 111.00 mark, the USD/JPY pair witnessed some selling on Thursday and for now, seems to have stalled its recent move up to the highest level since March 2020. The pullback was exclusively sponsored by a modest US dollar weakness, which remained on the defensive after mostly softer US macro releases.

The final GDP report confirmed that the US economy expanded by a 6.4% annualized pace during the first quarter of 2021, matching the preliminary estimates. Separately, Durable Goods Orders and Initial Weekly Jobless Claims fell short of market expectations. This, along with mixed signals on the US inflation acted as a headwind for the USD.

That said, the underlying bullish sentiment in the financial markets – as depicted by indications of a strong opening in the US equity markets – undermined the safe-haven Japanese yen. This, in turn, was seen as a key factor that held traders from placing any aggressive bearish bets around the USD/JPY pair and might help limit the downside.

Hence, it will be prudent to wait for some strong follow-through selling before confirming that the recent positive move witnessed over the past two months or so has run out of steam. This will set the stage for some meaningful corrective slide and drag the USD/JPY pair back towards challenging the key 110.00 psychological mark.

Technical levels to watch

USD/JPY

Overview
Today last price 110.78
Today Daily Change -0.17
Today Daily Change % -0.15
Today daily open 110.95
 
Trends
Daily SMA20 109.93
Daily SMA50 109.26
Daily SMA100 108.53
Daily SMA200 106.46
 
Levels
Previous Daily High 111.1
Previous Daily Low 110.62
Previous Weekly High 110.82
Previous Weekly Low 109.61
Previous Monthly High 110.2
Previous Monthly Low 108.34
Daily Fibonacci 38.2% 110.92
Daily Fibonacci 61.8% 110.81
Daily Pivot Point S1 110.68
Daily Pivot Point S2 110.42
Daily Pivot Point S3 110.21
Daily Pivot Point R1 111.16
Daily Pivot Point R2 111.37
Daily Pivot Point R3 111.64

 

 

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