USD/JPY Price Analysis: Declines towards 127.00 amid less-hawkish Fed policy


  • USD/JPY is demonstrating a less-confident pullback move as the risk profile is extremely positive.
  • A bear cross, represented by the 20-and 50-period EMAs around 130.00, adds to the downside filters.
  • The RSI (14) has shifted into the bearish range of 20.00-40.00, which indicates that the downside momentum has been triggered.

The USD/JPY pair has rebounded after finding an intermediate cushion around 128.20 in the Asian session. Considering the risk-on market mood, the downside bias is intact, therefore, investors should see the rebound mere a pullback that can be sold ahead.

S&P500 futures have eased some of their gains recorded in the Asian session, however, the risk appetite of the market participants is still strong as the impact of policy tightening slowdown decision by the Federal Reserve (Fed) will stay for a longer period. The US Dollar Index (DXY) is hovering near its fresh nine-month low around 100.51. While the 10-year US Treasury yields have rebounded above 3.40%.

On a two-hour scale, USD/JPY has delivered a breakdown of the Rectangle formation that indicates volatility explosion, which results in wider ticks to the south-side and heavy volume. A bear cross, represented by the 20-and 50-period Exponential Moving Averages (EMAs) around 130.00, adds to the downside filters.

The Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which indicates that the downside momentum has been triggered.

Should the asset breaks below intraday low around 128.17, Japanese Yen bulls will drag the asset toward Jnauary 16 low at 127.27 followed by May 24 low at 126.36.

On the contrary, the US Dollar bulls will get strengthened if the asset recovers above January 31 high around 130.50, which will drive the asset toward January 18 high at 131.57. A breach above the latter will extend the upside journey of the asset toward January 9 high at 132.65.

USD/JPY two-hour chart

USD/JPY

Overview
Today last price 128.54
Today Daily Change -0.29
Today Daily Change % -0.23
Today daily open 128.83
 
Trends
Daily SMA20 130.14
Daily SMA50 133.17
Daily SMA100 139.05
Daily SMA200 136.79
 
Levels
Previous Daily High 130.41
Previous Daily Low 128.54
Previous Weekly High 131.12
Previous Weekly Low 129.02
Previous Monthly High 134.78
Previous Monthly Low 127.22
Daily Fibonacci 38.2% 129.25
Daily Fibonacci 61.8% 129.7
Daily Pivot Point S1 128.11
Daily Pivot Point S2 127.39
Daily Pivot Point S3 126.24
Daily Pivot Point R1 129.98
Daily Pivot Point R2 131.13
Daily Pivot Point R3 131.85

 

 

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