USDJPY is consolidating in a narrow range, holding 134. On Monday, the pair grapples to gather momentum. And, oscillates between tepid gains and losses. Throughout the early European session. The pair is currently trading barely above 134.00. Seemingly halting Friday’s modest pullback from a nearly two-month high.
USDJPY signals bearish MACD signals
USDJPY extends the early-day retracement from the preceding weekly high near 132.90. Forming “Double tops,” a bearish graph structure. The RSI (14) line, which reversed from overbought conditions, and the bearish MACD signals also support the Yen pair’s recent weakness.
USDJPY Fundamental Perspective
Fundamental Overview
USDJPY recovers from an intraday low but holds firm with a head loss next to 132.00 in initial Tuesday morning Europe.
The Yen duo at first rejoiced at the drop in Treasury bond yields before Japanese government disclosures of Bank of Japan (BoJ) authorities triggered hardline anxieties.
This did weigh on the prices. The broad Greenback market correction is also preferring the USDJPY bears as traders brace for a welcome surprise from the US Consumer Price Index (CPI) for Jan.
Japan’s fourth quarter GDP in View
Earlier in the day, Japan’s preliminary fourth-quarter (Q4) Gross Domestic Product (GDP) data showed mixed results. Following that, the official nomination of Kazuo Ueda as the next Governor of the Bank of Japan weighed on USDJPY prices.
Nonetheless, Bloomberg published an evaluation predicting additional challenges to the Bank of Japan’s (BoJ) easy money plan during the incoming Kazuo Ueda’s rule.
It should be noted that Ueda earlier tried to defend the existing monetary and fiscal policy in his most recent talk.
US Fed Continues to be hawkish
US Federal Reserve (Fed) hardliners, continued to uphold rate hike fears, but the market’s pricing of sluggish raising rates as well as a closer high point emerged to have factored on US Treasury bond yields. As a result, US 10-year Treasury bond yields tumbled nearly 2 basis points to 3.69 percentage points at the earliest, trying to reverse the one peak the day before.
China and US tensions
In other news, renewed fears of US-China tensions over the balloon shooting challenge perception and put a ceiling under the USDJPY value.
“The US Congress will conduct a cross-party investigation into unidentified aerial objects which have entered the US and Canadian airspace and why they were not discovered quicker,” said US Senate Majority Leader Chuck Schumer.
It’s worth noting that a US military general earlier ruled out the likelihood of China’s involvement in the “unnamed objects” shot down this past weekend.
Against such a backdrop, the S&P 500 Futures contract slightly, while Japan’s Nikkei 225 goes up 0.65 percent intraday to relatively close to 27,600.
Technical Perspective
The USDJPY currency duo printed a strong bullish candlestick last week. The US Dollar has been the hardest-hitting currency over the last week,
The US Dollar has been the robust currency over the last week, This movement is primarily fueled by Yen’s vulnerability.
While there is an evident short-term bullish tendency, no long-term trend exists. As a consequence, the main takeaway is that the Yen is volatile.
As a consequence, the important thing is that the Yen is volatile. Look for sturdy reversals from key levels. Either in the long or short paths and trade them consequently in the near term.
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