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USD/JPY remains stable around the 134.00 level

  • USD/JPY attracts some buying on Thursday and turns positive for the third day in a row.
  • The divergence between the monetary policy of the Fed and the Bank of Japan continues to weigh on the yen and offers support to the pair.
  • Falling US bond yields keep dollar bulls on the defensive and could cap gains.

The pair USD/JPY recovers from an initial drop to the 133.40 area and turns positive for the third day in a row on Thursday. At the time of writing, the pair remains above the 134.00 levelwith the bulls now targeting the weekly high made the previous day.

The large divergence in the monetary policy stance adopted by the Federal Reserve and the Bank of Japan continues to weigh on the Japanese yen, which in turn acts as a tailwind for the USD/JPY pair. It should be remembered that several Fed officials hinted this week that more hikes in short-term interest rates are on the way. Instead, the Bank of Japan has repeatedly called for maintaining its ultra-loose policy setting and its commitment to keep the 10-year Japanese government bond yield around 0%.

However, the USD/JPY pair’s rally seems limited amid the current drop in US Treasury bond yields., which keeps dollar bulls on the defensive. Apart from this, the cautious feeling around equity markets could give some support to the safe haven JPY and help limit any significant upside for the USD/JPY pair, at least for now. Therefore, it is prudent to wait for strong continuation buying before positioning for any further upside moves.

On Thursday, the focus will be on the Bank of England’s monetary policy decision, which could instill some volatility in the markets and give the USD/JPY pair a boost. In addition, traders will take as a reference the publication of the weekly data of the initial applications for unemployment benefits from the United States, which will be published later at the beginning of the American session. This, coupled with US bond yields, could influence dollar price dynamics and allow traders to take advantage of some short-term opportunities.

USD/JPY technical levels

USD/JPY

Overview
last price today 134.19
Today I change daily 0.34
Today’s daily variation in % 0.25
Daily opening today 133.85
Trends
daily SMA20 136.27
daily SMA50 134.6
daily SMA100 130.41
daily SMA200 122.55
levels
Previous daily high 134.55
Previous Daily Low 132.29
Previous Weekly High 137.46
Previous Weekly Low 132.5
Previous Monthly High 139.39
Previous Monthly Low 132.5
Daily Fibonacci of 38.2%. 133.69
Daily Fibonacci of 61.8% 133.15
Daily Pivot Point S1 132.58
Daily Pivot Point S2 131.3
Daily Pivot Point S3 130.32
Daily Pivot Point R1 134.84
Daily Pivot Point R2 135.82
Daily Pivot Point R3 137.1

Source: Fx Street

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