USD/JPY back above 155.00 amidst broad-market Yen weakness

FXStreet
Updated May 17, 2024 06:17
Mitrade

■USD/JPY pares away recent declines but still down from recent peaks.

■Japanese GDP contracts more than expected, battering Yen.

■Fedspeak weighs on risk sentiment, but rate cut hopes remain.


USD/JPY recovered ground on Thursday, climbing back over the 155.00 handle after dipping to 153.60 on Wednesday. Japanese growth figures contracted more than expected, and Federal Reserve (Fed) rate cut hopes are struggling beneath the weight of cautionary talking points from Fed officials.


Japan’s Gross Domestic Product (GDP) contracted more than expected in the first quarter, declining -0.5% QoQ compared to the previous quarter’s flat 0.0% print, revised down slightly from the initial print of 0.1%. Markets were expecting a -0.4% contraction. Annualized Japanese GDP growth also contracted, decline -2.0% for the year ended Q1, worse than the expected -1.5% and down from the previous 0.0% (also revised down from 0.4%).


Fed officials have begrudgingly begun to hint at the possibility of late-year rate cuts in 2024, but remain overly cautious regarding the US’ inflation outlook and still-tight labor market. Inflationary pressures continue to ease, helping to bolster broad-market hopes for a Fed rate cut, but price growth still remains well above the Fed’s 2% target, and Fed policymakers are leery after disinflation progress slowed in the first quarter.


Despite risk appetite cooling slightly during the Thursday US market session, rate traders still expect the Fed to meet rate cut expectations. According to the CME’s FedWatch Tool, rate markets are pricing in 70% odds of a September rate trim of at least a quarter of a percent.


USD/JPY technical outlook


USD/JPY’s technical recovery on Thursday dragged the pair back over the 155.00 handle, but technical resistance sits nearby at the 200-hour Exponential Moving Average (EMA) at 155.44. The pair remains down from the last swing high above 156.50, but USD/JPY has recovered from the near-term low near 152.00.


USD/JPY is still trading deeply into bull country, bolstered above the 50-day EMA at 153.36 and trading well above the 200-day EMA at 148.48. Despite a suspected “Yentervention” from the Bank of Japan (BoJ) recently, the pair is still up over 10% in 2024.


USD/JPY hourly chart



USD/JPY daily chart



USD/JPY


Overview
Today last price 155.37
Today Daily Change 0.49
Today Daily Change % 0.32
Today daily open 154.88
 
Trends
Daily SMA20 155.34
Daily SMA50 152.75
Daily SMA100 150.22
Daily SMA200 148.92
 
Levels
Previous Daily High 156.56
Previous Daily Low 154.69
Previous Weekly High 155.95
Previous Weekly Low 152.8
Previous Monthly High 160.32
Previous Monthly Low 150.81
Daily Fibonacci 38.2% 155.41
Daily Fibonacci 61.8% 155.85
Daily Pivot Point S1 154.19
Daily Pivot Point S2 153.51
Daily Pivot Point S3 152.32
Daily Pivot Point R1 156.07
Daily Pivot Point R2 157.25
Daily Pivot Point R3 157.94

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

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