Home Forex USD/JPY bears are taking over and moving at a critical support level

USD/JPY bears are taking over and moving at a critical support level

by SuperiorInvest
  • USD/JPY bears are in control of the Asian session and are seeing a downward extension.
  • Bulls need to commit at key support at this point.

USD/JPY is lower on the day as the US dollar comes under pressure ahead of US inflation data due later today in the New York session. At the time of writing, the pair is losing around 0.13% and has fallen from a high of 142.84 to a low of 142.41 so far.

U.S. bond yields lost ground on Monday, taking a lead from Europe, but ended the session higher as markets eyed today’s Consumer Price Index printing. 2-year Treasury yields climbed from 3.51% to 3.56% and 10-year Treasury yields moved from 3.33% to 3.36%. They are falling in Tokyo, which has only added support.

As for today’s data, analysts at Westpac said it would “highlight downward pressure on headline inflation, driven by falling oil prices (market F/c: -0.1% m/m, 8.1% y/y, down from 8.5% annually in July). Therefore, the focus is on core measures to better gauge the current rate of inflation and the likely response of the Federal Open Market Committee (market F/c: +0.3% m/m, 6.1% y/y vs 5.9% y/y July).’ ‘

Meanwhile, net short positions in the JPY rose back to their July levels, reflecting the Bank of Japan’s continued dovish policy stance, analysts at Rabobank said. ”This has prompted some verbal intervention from Japanese government officials in recent days, although actual intervention would be politically inconvenient both in terms of G7 disapproval and because it would be backed by the BoJ’s policy position.”

USD/JPY Technical Analysis

According to the previous analysis, USD/JPY Price Analysis: Bears in control ahead of Tokyo, 142.50 eye, then 141.50the hourly chart showed that the price was correcting from the previous bullish run, filling the wick left by the previous bearish hourly bar.

The continuation below in the Tokyo session was predicted to complete the move into the neckline of the W-formation:

This is the first defense on the way to a daily 38.2% Fibonacci targets near 141.50:

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