- USD/JPY continues to consolidate its sideways trend for the second day in a row.
- Dovish Fed expectations continue to act as a tailwind for the USD and support the pair.
- Recession risks benefit the JPY as a safe haven and limit the pair’s gains ahead of Powell’s testimony.
The pair USD/JPY continues its struggle to gain significant traction and extends its consolidating sideways move for the second day in a row on Tuesday. The pair is currently sitting around the 136.00 level, virtually unchanged for the day, and remains a short distance from the yearly high, around the 137.10 region hit last Friday.
The prospects for further tightening of monetary policy by the Fed continue to act as a tailwind for the US dollar (USD) and provide support for the USD/JPY pair. In fact, the markets seem convinced that the US central bank will maintain its hard-line stance and will keep rates higher for longer in the wake of stubbornly high inflation. These expectations were boosted by US macroeconomic data, which indicated that the inflation is not falling as fast as expected and they pointed to an economy that continues to hold up despite rising borrowing costs.
In addition, several FOMC policymakers have recently supported rate hikes and have opened the door to a rise of 50 basis points at the March meeting. Therefore, the market will remain attentive to the biannual appearance of the Fed Chairman, Jerome Powell, before the Banking Committee of the Senate, which will take place during the American session. Investors will look New Clues on the Fed’s Future Rate Hike Pathwhich will influence the USD price dynamics and determine the next directional move for the USD/JPY pair.
Ahead of the key event, a slight pullback in US Treasury yields is holding back USD bulls from taking aggressive positions and is acting as a headwind for the USD/JPY pair. However, Expectations that the Bank of Japan will maintain ultra-easy monetary policy to support the fragile domestic economy continue to cushion declines. In fact, the incoming BoJ governor, Kazuo Ueda declared last week that the central bank does not intend to move quickly away from a decade of massive easing..
Therefore, the BoJ’s monetary policy decision, due to be announced on Friday, is unlikely to provide any respite for the yen, suggesting that the path of least resistance for USD/JPY is to the upside. Investors will also be faced with the release of monthly US employment data, popularly known as NFP, this week. Meanwhile, the risks of a looming recession could limit deeper losses for the yen and hold off any significant bullish moves for the pair, at least for now.
USD/JPY technical levels to watch
USD/JPY
Overview | |
---|---|
Last price today | 135.98 |
Today Change Daily | -0.01 |
today’s daily variation | -0.01 |
today’s daily opening | 135.99 |
Trends | |
---|---|
daily SMA20 | 134.27 |
daily SMA50 | 132.15 |
daily SMA100 | 136.5 |
daily SMA200 | 137.35 |
levels | |
---|---|
previous daily high | 136.19 |
previous daily low | 135.37 |
Previous Weekly High | 137.1 |
previous weekly low | 135.26 |
Previous Monthly High | 136.92 |
Previous monthly minimum | 128.08 |
Fibonacci daily 38.2 | 135.88 |
Fibonacci 61.8% daily | 135.68 |
Daily Pivot Point S1 | 135.51 |
Daily Pivot Point S2 | 135.03 |
Daily Pivot Point S3 | 134.69 |
Daily Pivot Point R1 | 136.33 |
Daily Pivot Point R2 | 136.67 |
Daily Pivot Point R3 | 137.15 |
Source: Fx Street

I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.