USD/JPY cuts gains and returns below 132.00

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  • USD/JPY rebounds to 125 pips from the daily low, although the intraday bounce loses strength.
  • A generally positive risk tone weakens the yen.
  • Dollar weakness limits USD/JPY gains and calls for caution.

The pair USD/JPY managed to find buyers after falling to the 131.30 zone on Monday and rebounded to 132.65, reaching a new daily high during the European session, although it could not rise further and lost strength. The pair, however, remains slightly positive heading into the North American session and is currently positioned around the 132.30 area.

The broadly positive tone in equity markets weakens the Japanese Yen and provides some support for the USD/JPY pair. Global risk sentiment is boosted by the biggest turnaround from China, which continues to move away from its zero-COVID policy. Indeed, China opened its borders over the weekend for the first time in three years, though concerns about a deeper global economic downturn limit optimism.

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Apart from this, the predominance of the selling trend of the US dollar, in the midst of the growing bets for a less aggressive tightening of the policy of the Federal Reserve, acts as a headwind for the USD/JPY pair. The mixed US jobs report (NFP) on Friday and the disappointing release of the US ISM services PMI fueled speculation that the US central bank will soften its hawkish stance. Furthermore, markets are turning towards a 25 basis point hike for the next FOMC policy meeting in February.

Apart from this, recent reports that the bank of japan plans to raise its inflation forecasts could support the yen and help cap the USD/JPY pair. This, in turn, suggests that the path of least resistance for prices is down. Therefore, recovery attempts could be seen as a selling opportunity and remain limited, at least for now, in the absence of relevant US macroeconomic data.

technical levels


Last price today 132.28
Today Change Daily 0.18
today’s daily variation 0.14
today’s daily opening 132.1
daily SMA20 133.72
daily SMA50 138.02
daily SMA100 140.95
daily SMA200 136.46
previous daily high 134.78
previous daily low 131.99
Previous Weekly High 134.78
previous weekly low 129.51
Previous Monthly High 138.18
Previous monthly minimum 130.57
Fibonacci daily 38.2 133.06
Fibonacci 61.8% daily 133.71
Daily Pivot Point S1 131.14
Daily Pivot Point S2 130.17
Daily Pivot Point S3 128.35
Daily Pivot Point R1 133.92
Daily Pivot Point R2 135.74
Daily Pivot Point R3 136.7

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Source: Fx Street

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