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USD/JPY ticks down, last at 133.88 ahead of US Retail Sales data

  • USD/JPY trades close to session lows of 133.82 at the time of press.
  • Global markets stay unpredictable even as concerns over US inflation and SVB troubles subside.
  • US Retail Sales/PPI and Japan Imports/Exports/Merchandise Trade Balance data are to be followed on Wednesday.

Daily price movements:

USD/JPY prints a slightly negative intraday movement on Wednesday, with the last recorded price at 133.88. The currency pair started the session at 134.22, the previous close, and fluctuated between the lowest intraday price of 133.82 and the highest intraday price of 135.10. The overall intraday price change stands at -0.03% at press time.

The US 10-year Treasury bond yield hovers around 3.67%, diminishing the prior day's rebound, while the two-year bond yield climbs to 4.32% at press time. Notably, the US 10-year Treasury bond yield recorded its most significant daily increase in five weeks on Tuesday, while the two-year counterpart rebounded from a six-month low.

The Bank of Japan's (BoJ) mildly dovish Monetary Policy Meeting Minutes support the USD/JPY's upward movement. According to the BoJ Minutes statement, "It is important to continue with monetary easing."

Furthermore, the BoJ Minutes revealed that members concurred that Japan's inflation would decelerate during the latter part of the upcoming fiscal year.

Daily economic events:

USD/JPY traders should closely monitor the below data: 

  • US February Retail Sales (12:30 GMT)
  • US Producer Price Index (excluding Food and energy at 12:30 GMT)
  • Japan Import/Export/Merchandise Trade Balance (23:50 GMT)

Meanwhile, bond yields and ‘shunto’ negotiations may provide further guidance for traders of the Yen pair.

Technical View:

The USD/JPY pair trades just above its daily 50-SMA (133.87), signaling a bullish trend in short to medium term. The currency pair surpassed the 38.2% Fibonacci level at 134.19 but did not reach the 61.8% Fibonacci level at 133.74, suggesting some support near the latter level.

The daily RSI(14) of 48.128 indicates a neutral momentum as the pair hovers around the 50 mark. However, the market may encounter some resistance, as the daily resistance levels are 135.08, 135.93, and 136.95.

The daily pivot point for the USD/JPY pair is 134.05. The daily support levels are found at 133.20, 132.18, and 131.33. If the pair manages to break above the pivot point, it may test the resistance levels, while a break below the pivot point could trigger a test of the support levels.

 

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