The USD/JPY currency pair has demonstrated a restrained recovery, surging from its one-week low near the 148.15 mark, registered during Tuesday's Asian trading session. This rebound saw the currency pair rise to new intraday highs within the recent hour. Nevertheless, its movements seem tethered to a consistent range observed over the previous week, with current trading oscillating between 148.60 and 148.65, marking an increase of a meager 0.10% on the day.
Factors Influencing the Pair's Performance One of the predominant catalysts supporting the USD/JPY pair appears to be the prevailing optimistic risk sentiment, which dents the allure of the safe-haven Japanese Yen (JPY).
However, this intraday upward movement seems to lack robust momentum due to a tepid demand for the US Dollar (USD). The dwindling anticipation for more aggressive interest rate hikes from the Federal Reserve (Fed) has subsequently dampened US Treasury bond yields. This suppression of yields keeps the USD bulls in check, acting as a counterforce against major currency pair gains.
A Deep Dive into Technical Indicators
From a technical standpoint, the USD/JPY seems to have settled below the 100-period Simple Moving Average (SMA) on its 4-hour chart. Further compounding this stance, the oscillators on the hourly charts remain entrenched in the negative zone. However, these indicators have not solidified a bearish stance on the daily charts yet. Given this configuration, if there's any downward movement, it's expected to encounter significant support close to the 148.00 threshold, further anchored by the 200-period SMA in the 147.70-147.65 range.
This zone could serve as a pivotal fulcrum: breaching this could hasten the pair's descent to around 147.30, reminiscent of the lowest level recorded since September 14 from the previous Tuesday. Subsequent to this is the 147.00 psychological mark; if undercut, it could signify a short-term ceiling for spot prices, ushering in a significant depreciation phase.
Conversely, any upward shifts might encounter resistance around the 149.00 boundary, leading up to the 149.30-149.35 resistance zone. Persistent momentum beyond this realm might empower the USD/JPY pair to challenge and possibly reclaim the coveted 150.00 psychological mark, regarded by some as a potential intervention level. If this bullish momentum is sustained with additional purchasing activity, it would cement a new upward trajectory, propelling spot prices in the direction of the 151.00 mark and potentially even reaching the 152.00 vicinity, reminiscent of the multi-decade peak achieved in October 2022.
