USD/JPY remains capped below 147.45 ahead of US data

• Dollar recovery fails at 147.45 and keeps bears in charge.
• Speculation about Fed cuts in March is limiting USD’s upside attempts.
• Hopes of some BoJ monetary policy normalisation support the Yen.

The US Dollar’s recovery from Monday’s lows met resistance at 147.45, and the pair has been trading on a moderate bearish tone on Tuesday. Investor’s cautious mood ahead of a slew of key US employment figures has cushioned the Japanese Yen’s reversal.

Fed rate cuts hopes are weighing on the US Dollar

increasing speculation that the Fed is done with hikes and that the US central bank will start trimming rates in March is weighing on the US Dollar.

On the contrary, the Bank Of Japan is expected to exit its ultra-loose monetary policy in the coming months. This coupled with the risk-off market sentiment is cushioning the safe-haven Japanese Yen’s losses.
 

In the calendar, today the US Services ISM and the Jolt Openings will lay the ground to Wednesday’s ADP and Friday’s Nonfarm Payrolls, the main event of the week.

From a technical point of view, the 4-hour char shows the pair trading within a falling wedge, with in a bearish trend from Mid-November highs. Price action remains well below the main SMAs and the RSI has turned lower below its middle line suggesting that further decline is on the cards.

The next supports are 146.30 and 146.00. Resistances re the mentioned 147.45 and 148.50, the 38.2% retracement of the November - December decline. 
 

Technical levels to watch