USD/JPY tracks yields to snap two-day uptrend around 113.50 despite weaker Japan Q3 GDP


  • USD/JPY steps back from weekly top, refreshes intraday low.
  • US Treasury yields drop, stock futures dwindle as geopolitical headlines weigh on previous optimism.
  • Japan Q3 GDP came in softer, Tankan Survey portrays optimism for December.
  • Qualitative catalysts will be important for clear direction amid a lack of major data/events.

USD/JPY stays pressured around the daily bottom of 113.35 as markets in Tokyo open for Wednesday. In doing so, the yen pair declines for the first time in two days, down 0.05% of late, as fresh challenges to the sentiment weigh on US bond coupons.

Among the key-risk catalysts are the geopolitical tensions between Washington and Kremlin, as well as the US-China tussles. Adding to the sour sentiment could be the chatters surrounding the fears of Chinese real-estate companies’ default.

US President Joe Biden warns Russia of sanctions and would help Ukraine with military power if Kremlin invades Kyiv. “The Biden administration is in ‘intensive consultations’ with the new German government over its response if Russia invades Ukraine and believes Germany would be ready to take significant action if Russia launches an attack, a senior U.S. State Department official said on Tuesday,” said Reuters.

Further, the US boycott of the 2022 Beijing Olympics doesn’t bode well with China as the dragon nation hints at consequences due to the same. Additionally, the market’s optimism also fades amid doubts over China’s struggling real-estate firms’, Evergrande and Kaisa, capacity to pay the looming debt after barely paying the interests.

It’s worth noting that Japan’s optimism for more stimulus and receding fears of the South African coronavirus variant, dubbed as Omicron keep USD/JPY buyers hopeful. On the same line is China’s readiness for safeguarding the financial system from default and covid risks.

Talking about data, Japan’s Q3 GDP dropped below -0.8% initial forecast to -0.9% while Tankan Manufacturers’ survey for December was quite optimistic, citing manufacturers’ gauge refreshing four-month high.

While portraying the market mood, the US 10-year Treasury yield snaps a two-day uptrend around 1.47%, down two basis points (bp), whereas S&P 500 Futures struggle to follow its Wall Street benchmark that rallied the most since March.

Given the lack of interesting data/events on the calendar, risk-related headlines are important for the USD/JPY traders to watch for fresh impulse.

Technical analysis

Tuesday’s Doji below 20-DMA level of 113.95 directs USD/JPY towards the previous resistance line from March, around 112.60 at the latest.

Additional important levles

Overview
Today last price 113.46
Today Daily Change -0.02
Today Daily Change % -0.02%
Today daily open 113.48
 
Trends
Daily SMA20 113.97
Daily SMA50 113.49
Daily SMA100 111.71
Daily SMA200 110.59
 
Levels
Previous Daily High 113.78
Previous Daily Low 113.4
Previous Weekly High 113.96
Previous Weekly Low 112.53
Previous Monthly High 115.52
Previous Monthly Low 112.53
Daily Fibonacci 38.2% 113.64
Daily Fibonacci 61.8% 113.55
Daily Pivot Point S1 113.33
Daily Pivot Point S2 113.18
Daily Pivot Point S3 112.95
Daily Pivot Point R1 113.71
Daily Pivot Point R2 113.94
Daily Pivot Point R3 114.09

 

 

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