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USD/JPY Price Analysis: Trapped around 129.50 on risk aversion

  • USD/JPY pulls back from weekly highs above 130.00 and falls below the 20-hour SMA, targeting 129.50.
  • Risk appetite has improved but remains fragile and could change at any time.
  • USD/JPY Price Forecast: On the 1 hour chart, USD/JPY is in a range, but slightly slanted to the downside.

The USD/JPY pulls back from three-week highs, and the bears are dragging the price towards 130.00, aiming to push it towards the 20-day moving average (DMA) around 128.66, amid a risk-off session. At the time of writing, USD/JPY is trading at 129.79, posting a decent 0.23% loss.

In addition to US dollar weakness, which buoyed the yen, flat US Treasury yields contributed to USD/JPY’s decline. The 10-year Treasury bond yield stands at 2.919%, unchanged for the session.

Sentiment has improved in the North American session as US stocks post gains. The dollar index, as mentioned, is paring Wednesday’s losses, down 0.64% to 101.894. Mixed US economic data weighed on sentiment a bit, but markets lack clear direction ahead of Friday’s Non-Farm Payrolls report.

On the other hand, USD/JPY retraced from weekly highs at 130.24, but the decline was capped near the 50-hour simple moving average (SMA) at 129.54, and then rose towards the 20-hour SMA at 129.92, to settle near 129.75.

USD/JPY Price Forecast: Technical Outlook

From a daily chart point of view, USD/JPY, although in an uptrend, is consolidating in the 129.00 high. The Relative Strength Index (RSI) is in bullish territory but is pointing lower, so buying pressure is easing.

On the hourly chart of USD/JPY, the currency is trapped inside the 20 and 50 hour SMAs. Furthermore, the RSI changed gears, below the 50 midline, sloping downward as USD/JPY approaches the daily pivot at 129.62. However, USD/JPY needs to break below the current daily low at 129.51 to pave the way for further bearish action.

If this scenario plays out, the first resistance for USD/JPY would be the daily S1 pivot at 129.05, which once breached would expose the May 31 high at 128.89. A break of the latter would expose the 100 hourly SMA at 128.55.

Technical levels


Last Price Today 129.8
Today’s Daily Change -0.32
Today’s Daily Change % -0.25
Today’s Daily Opening 130.12
20 Daily SMA 128.72
50 Daily SMA 127.06
100 Daily SMA 121.4
200 Daily SMA 117.17
Previous Daily High 130.19
Previous Daily Minimum 128.65
Previous Maximum Weekly 128.09
Previous Weekly Minimum 126.36
Monthly Prior Maximum 131.35
Previous Monthly Minimum 126.36
Daily Fibonacci 38.2% 129.6
Daily Fibonacci 61.8% 129.23
Daily Pivot Point S1 129.11
Daily Pivot Point S2 128.11
Daily Pivot Point S3 127.57
Daily Pivot Point R1 130.66
Daily Pivot Point R2 131.19
Daily Pivot Point R3 132.2

Source: Fx Street

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