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USD/JPY struggles post-plunge due to mixed US data, intervention concerns

  • USD/JPY trades down by a slight 0.07% after a dramatic 240-pip plunge last Tuesday, attributed to perceived intervention by Japanese authorities.
  • US Federal Reserve might avoid hiking rates after ADP’s Employment Change, disappointed market participants.
  • With US Treasury bond yields easing from yearly highs and lingering concerns about further interventions, USD/JPY’s upward momentum is stifled.

The US Dollar (USD) fails to recover from Tuesday’s losses against the Japanese Yen (JPY), following last Tuesday’s plunge of 240 pips following the release of the JOLTs report, which was perceived as an intervention by Japanese authorities. The USD/JPY is trading at 148.88, down by a minuscule 0.07%, after hitting a daily high of 149.31.

USD/JPY pair lingers at around 148.88, on mixed US economic data and silent Japanese authorities following suspected intervention keeping traders cautious

The latest round of US economic data probed to be mixed during the North American session. The US Employment Change report revealed by Automatic Data Processing (ADP) showed that private companies hired 89K Americans, less than the 153K estimated, suggesting the labor market is loosening as widely expected by the US Federal Reserve (Fed). Also, the Institute for Supply Management (ISM) showed that business activity in the services segment expanded slower than in August, with figures coming as expected at 53.6, while the latter hit 54.5.

In the meantime, Japanese authorities muted comments on a possible intervention on Tuesday, following the US JOLTs report that underpinned the USD/JPY past the 150.00 figure, though some minutes after that, the major plunged 200 plus pips and printed the low of the week.

Given the backdrop, the USD/JPY struggles to edge higher, also weighed by US Treasury bond yields easing from yearly highs. The US 10-year benchmark note rate hit 4.884% during the day but treads water, hovering around 4.739% at the time of writing.

USD/JPY Price Analysis: Technical outlook

The daily chart portrays the pair as neutral to upward biased, but since testing the Kijun-Sen and dropping below 149.00, the path of least resistance Is slightly tilted to the downside. The first support is the Tenkan-Sen at 148.71, followed by the Senkou-Span A at 148.00. A dive below that level and the next stop would be yesterday’s low of 147.27, confluence with the Kijun-Sen, and then 147.00. On the flip side, price action is capped at 149.00, followed by the 150.00 mark.

USD/JPY

Overview
Today last price148.88
Today Daily Change-0.14
Today Daily Change %-0.09
Today daily open149.02
 
Trends
Daily SMA20148.21
Daily SMA50146
Daily SMA100143.42
Daily SMA200138.2
 
Levels
Previous Daily High150.16
Previous Daily Low147.32
Previous Weekly High149.71
Previous Weekly Low148.25
Previous Monthly High149.71
Previous Monthly Low144.44
Daily Fibonacci 38.2%148.4
Daily Fibonacci 61.8%149.07
Daily Pivot Point S1147.51
Daily Pivot Point S2145.99
Daily Pivot Point S3144.66
Daily Pivot Point R1150.35
Daily Pivot Point R2151.68
Daily Pivot Point R3153.19

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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