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USD/JPY Finds Short-Term Support Above 139.00 Amid Dollar Recovery

  • USD/JPY has found fragile support around 139.10 after the recovery of the DXY Dollar Index.
  • Investors appear taken aback by crucial US economic data as it has split expectations about the Fed’s monetary policy.
  • The BoJ Governor has pledged to continue quantitative easing until the inflation target is achieved.

The pair USD/JPY has found intermediate support around the 139.00 level during the European session on Tuesday. Bearish momentum in the pair has stalled near that level as the DXY Dollar Index has shown a decent recovery move after defending crucial support around 103.80.

S&P 500 futures post slight losses during the session, reflecting the cautiousness of the markets. Investors appear puzzled after the release of crucial US economic data for May as They have divided the expectations on the interest rate policy of the Federal Reserve (Fed) for the month of June.

The DXY index is struggling to stay above 104.00. Investors are divided on the Fed’s monetary policy, as The steady addition of new payrolls to the labor market is expected to keep spending levels at a peak, leading to demand-driven inflation. Weakening economic activity supports a neutral interest rate policy to prevent the US economy from falling into recession.

Meanwhile, US commercial bank loans remain higher despite the Fed’s interest rate hike. In an interview with CNBC on Monday, the Managing Director of the International Monetary Fund (IMF) , Kristalina Georgieva, stated that “we still do not see a significant slowdown in lending”adding: “There is, but not on the scale that would lead the Fed to cut them.”

The Japanese yen continues to strengthen despite dovish comments from the Bank of Japan (BoJ) governor, Kazuo Ueda, who has said that “the central bank will continue quantitative easing until the inflation target is achieved”. In addition, Ueda has added that the changes are gradually emerging to a deflationary mindset that prices and wages are difficult to increase.

USD/JPY technical levels

Last price today 139.21
Today Daily Variation -0.37
today’s daily variation -0.27
today’s daily opening 139.58
daily SMA20 138.09
daily SMA50 135.48
daily SMA100 134.07
daily SMA200 137.3
previous daily high 140.45
previous daily low 139.25
Previous Weekly High 140.93
previous weekly low 138.43
Previous Monthly High 140.93
Previous monthly minimum 133.5
Fibonacci daily 38.2 139.71
Fibonacci 61.8% daily 139.99
Daily Pivot Point S1 139.07
Daily Pivot Point S2 138.56
Daily Pivot Point S3 137.87
Daily Pivot Point R1 140.27
Daily Pivot Point R2 140.96
Daily Pivot Point R3 141.48

Source: Fx Street

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