- USD/JPY drifted into the negative territory for the second consecutive day.
- The downtick seemed unaffected after the BoJ reaffirmed its dovish bias.
- The Fed’s hawkish pivot underpinned the USD and might help limit losses.
The USD/JPY pair refreshed daily lows heading into the European session, with bears now looking to extend the corrective pullback further below the key 110.00 psychological mark.
The pair struggled to capitalize on its modest intraday uptick, instead met with some fresh supply near the 110.30-35 region and turned lower for the second consecutive session on Friday. The downtick dragged the USD/JPY pair further away from the highest level since early April, around the 110.80 region touched in the aftermath of the Fed's sudden hawkish shift.
Traders seemed rather unaffected by the latest monetary policy update by the Bank of Japan (BoJ). As was widely anticipated, the BoJ kept its benchmark policy rate on hold at -0.10% and maintained its pledged to buy J-REITS at an annual pace of up to ¥180 billion. The only point of interest was an extension of the pandemic-relief program by six months to March 2022.
Meanwhile, the pullback lacked any obvious fundamental catalyst and is more likely to remain limited amid the prevalent strong bullish sentiment surrounding the US dollar. The Fed on Wednesday brought forward its projections for the first post-pandemic interest rate hikes. This should continue to act as a tailwind for the greenback and lend some support to the USD/JPY pair.
Even from a technical perspective, the post-FOMC upswing confirmed a near-term bullish breakout through a symmetrical triangle. Hence, any subsequent slide might still be seen as a buying opportunity. That said, a cautious mood and softer US Treasury bond yields might hold bullish traders from placing any aggressive bets around the USD/JPY pair.
Technical levels to watch
|Today last price||110.04|
|Today Daily Change||-0.17|
|Today Daily Change %||-0.15|
|Today daily open||110.21|
|Previous Daily High||110.82|
|Previous Daily Low||110.17|
|Previous Weekly High||109.84|
|Previous Weekly Low||109.19|
|Previous Monthly High||110.2|
|Previous Monthly Low||108.34|
|Daily Fibonacci 38.2%||110.42|
|Daily Fibonacci 61.8%||110.57|
|Daily Pivot Point S1||109.98|
|Daily Pivot Point S2||109.74|
|Daily Pivot Point S3||109.32|
|Daily Pivot Point R1||110.63|
|Daily Pivot Point R2||111.06|
|Daily Pivot Point R3||111.29|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.