USD/JPY outlook: Extends advance on fresh dovish comments from BoJ

Slobodan Drvenica Windsor Brokers

USD/JPY

Bounce from last Thursday’s multi-month low and a bear-trap, extends into second consecutive day and accelerates on Monday.

The dollar benefited from stronger than expected US jobs data in November, which shifted the view about rate cuts in 2024, while BoJ softened the narrative about start of tightening its ultra-loose policy, by comments that there is a little need to end negative rates in December.

Fresh extension higher broke above pivotal Fibo barrier at 145.56 (38.2% of 151.90/141.65), close above which would add to bullish near-term outlook.

Bulls pressure next pivots at 146.70 zone (10DMA/50% retracement) which guards key 148.00 zone (Fibo 61.8%/20DMA/daily cloud base).

Daily studies are improving, as strong downside rejection and bear-trap under 200DMA, underpin the action, though 14-d momentum is still in negative territory and MA’s are predominantly in bearish configuration, keeping in play risk of recovery stall.

Daily close above 145.56 Fibo level (reverted to support) is needed to keep near-term bias with bulls.

Res: 146.70; 147.00; 147.51; 148.00.
Sup: 145.56; 144.80; 144.07; 142.37.

Interested in USD/JPY technicals? Check out the key levels

1. R3 148.71
2. R2 146.97
3. R1 145.98
PP 144.24
1. S1 143.25
2. S2 141.51
3. S3 140.52

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

EUR/USD holds firm near 1.1850 amid USD weakness

EUR/USD remains strongly bid around 1.1850 in European trading on Monday. The USD/JPY slide-led broad US Dollar weakness helps the pair build on Friday's recovery ahead of the Eurozone Sentix Investor Confidence data for February.

GBP/USD holds medium-term bullish bias above 1.3600

The GBP/USD pair trades on a softer note around 1.3605 during the early European session on Monday. Growing expectation of the Bank of England’s interest-rate cut weighs on the Pound Sterling against the Greenback.

Gold remains supported by China's buying and USD weakness as traders eye US data

Gold struggles to capitalize on its intraday move up and remains below the $5,100 mark heading into the European session amid mixed cues. Data released over the weekend showed that the People's Bank of China extended its buying spree for a 15th month in January. Moreover, dovish US Fed expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.

Cardano steadies as whale selling caps recovery

Cardano (ADA) steadies at $0.27 at the time of writing on Monday after slipping more than 5% in the previous week. On-chain data indicate a bearish trend, with certain whales offloading ADA. However, the technical outlook suggests bearish momentum is weakening, raising the possibility of a short-term relief rebound if buying interest picks up.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.