USD/JPY Posts Third Consecutive Weekly Decline Despite Risk Appetite

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  • The US dollar continues to decline across the board.
  • The yen loses market momentum amid risk appetite.
  • USD/JPY does not benefit from Wall Street’s rally.

The USD/JPY is about to end the week trading around 127.00. The pair bottomed Tuesday at 126.35, the lowest level in five weeks, and then bounced back finding resistance below 127.50. It is about to register the third consecutive weekly decline.

The US dollar remains weak and continues to correct lower against G10 currencies from multi-year highs. Improved risk sentiment fueled the pullback, which was also fueled by stable US yields.

Demand for Treasuries remained strong despite the rally on Wall Street. The S&P 500 is headed for a weekly gain of more than 5%. US yields fell during the week. The yield on US 10-year bonds stands at 2.74%, far from 3.20% (May 9).

“In March, USD/JPY broke above 117 and rose sharply. IMM data shows that leveraged funds’ short JPY position expanded over the next four weeks at the fastest pace in five years. Interestingly, despite After this week’s risk rally, USD/JPY has failed to rally and reached a new low on Tuesday. We continue to see downside risks over the coming weeks,” MUFG Bank analysts wrote.

In the short term, the USD/JPY bias is to the downside. A break below 126.50 would open the doors for further losses, targeting 126.20 and then 125.75. To the upside, a recovery above 127.50 (horizontal resistance and downtrend line from recent high) should remove the negative bias.

Technical levels

USD/JPY

Panorama
Last Price Today 127.16
Today’s Daily Change -0.01
Today’s Daily Change % -0.01
Today’s Daily Opening 127.17
Trends
20 Daily SMA 129
50 Daily SMA 126.4
100 Daily SMA 120.87
200 Daily SMA 116.8
levels
Previous Daily High 127.58
Previous Daily Minimum 126.55
Previous Maximum Weekly 129.78
Previous Weekly Minimum 127.02
Monthly Prior Maximum 131.26
Previous Monthly Minimum 121.67
Daily Fibonacci 38.2% 126.95
Daily Fibonacci 61.8% 127.19
Daily Pivot Point S1 126.62
Daily Pivot Point S2 126.07
Daily Pivot Point S3 125.59
Daily Pivot Point R1 127.65
Daily Pivot Point R2 128.13
Daily Pivot Point R3 128.68

Source: Fx Street

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