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USD/JPY bounces from the low above 128.50

  • USD/JPY is under renewed selling pressure and is affected by a combination of factors.
  • The deterioration in market sentiment gives the yen some support.
  • The currency fully recovered after the fall that followed the Bank of Japan’s decision.

The pair USD/JPY it extended the sharp pullback that began on Tuesday from the 131.55 zone, the weekly high, and fell to 127.73. From there he bounced and is trading at the 128.50/6 zone. It is still negative but far from the minimum.

The risk-off state prevailing in the equity markets benefits the Japanese Yen and puts some downward pressure on the USD/JPY pair. Investors remain concerned about headwinds stemming from the worst COVID-19 outbreak in China. This, along with the protracted war between Russia and Ukraine, has fueled concerns of a deeper global economic recession.

In addition, weaker US economic data released on Wednesday sparked recession fears and weighed on investor sentiment. Meanwhile, the risk averse current, along with bets on lower interest rate hikes by the Federal Reserve, drag Treasury yields lower. The yield on the two-year tranche dropped to its lowest since October. This keeps dollar bulls on the back foot and fails to support the USD/JPY pair.

However, the falls seem limited, at least for the moment, after the moderate decision of the bank of japan on Wednesday. In fact, the Japanese central bank kept interest rates ultra-low and left the yield control curve caps unchanged, defying expectations for more aggressive signals. Three this the yen had a crash, but in the following hours managed to fully recover.

Market participants now await the US economic calendar, with the Philadelphia Fed manufacturing index, the usual weekly initial jobless claims and housing market data. This, along with speeches from influential FOMC members and US bond yields, will be key for USD/JPY.

technical levels

USD/JPY

Overview
Last price today 128.4
Today Daily Variation -0.47
today’s daily variation -0.36
today’s daily opening 128.87
Trends
daily SMA20 131.48
daily SMA50 135.24
daily SMA100 140.32
daily SMA200 136.68
levels
previous daily high 131.58
previous daily low 127.57
Previous Weekly High 132.87
previous weekly low 127.46
Previous Monthly High 138.18
Previous monthly minimum 130.57
Fibonacci daily 38.2 130.05
Fibonacci 61.8% daily 129.1
Daily Pivot Point S1 127.1
Daily Pivot Point S2 125.33
Daily Pivot Point S3 123.08
Daily Pivot Point R1 131.11
Daily Pivot Point R2 133.35
Daily Pivot Point R3 135.12

Source: Fx Street

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