USDJPY is still trading below 147.45 ahead of US data.
The USDJPY is supported by modest monetary policy normalization by the Bank of Japan.
Dollar comeback fails at 147.45, keeping bears in control.
The US Dollar’s recovery from Monday’s lows ran into resistance at 147.45. And the pair is trading with a mild negative bias on Tuesday. The Japanese Yen’s reversal has been cushioned by investors’ cautious mindset. Ahead of a series of critical US jobs reports.
Speculation of Fed rate reduction in March is restricting USD gains.
Fed rate cuts are dragging on the US Dollar. Growing anticipation that the Fed is done raising rates. And will begin cutting rates in March is pushing on the US Dollar.
In contrast, the Bank Of Japan’s ultra easy monetary policy is expected to end in the coming months. This, combined with the risk off market mentality, is cushioning the losses of the safe haven Japanese yen.
Today’s US Services ISM and Jolt Openings will create the groundwork for Wednesday’s ADP and Friday’s Nonfarm Payrolls, the week’s big events.
Technical Outlook
Technically, the 4-hour chart shows the pair trading within a falling wedge and in a negative trend since the mid november highs. Price action is well below the key SMAs, and the RSI has fallen downward below its middle line, implying that further declines are likely.
146.30 and 146.00 are the next supports. Resistances include the previously indicated 147.45 and 148.50. As well as the 38.2% retracement of the November December decrease.
