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USD/JPY bounces off 21-day SMA despite broad risk-off

Written by By Anil Panchal | 2019-12-02 23:05:54 GMT
  • USD/JPY recovers from five days’ low.
  • The US-led challenges to global trade system stay, US President Donald Trump attacks the Fed.
  • Trade/political headlines will be in focus.

USD/JPY pulls back from the five days’ low while taking rounds to 109.00 amid the initial Asian trading session on Tuesday.

The quote registered the highest losses in a month’s time on Monday after headlines from the United States (US) flashed challenges to the global trading system. Also contributing to the pair’s declines were downbeat data from the US.

Be it the US-China phase-one stalemate or steel tariffs on South American economies, not to forget likely trade negative measures against the European Union (EU), the US ran the show of trade protectionism on Monday. Further, the US ISM manufacturing numbers stayed in the contraction territory for the fourth consecutive month and raised doubts on the strength of the world’s largest economy.

With this, the market’s risk aversion hit Wall Street on the first trading day of the month whereas the US 10-year Treasury yields recovered four basis points to 1.82%. However, the latest quotes seem to change with the S&P 500 Futures be mildly on the positive side with the US government bonds waiting for fresh directions.

Fed under attack…

The US President Donald Trump maintains his dislike for the US Federal Reserve’s (Fed) monetary policy as he recently said “the Fed should lower rates (there is almost no inflation) and loosen, making us competitive with other nations, and manufacturing will SOAR! The dollar is very strong relative to others.” While the Fed policymakers are on the blackout session, downbeat data from the US keep diming odds of any monetary policy stabilization amid contrasting comments from the US President Trump.

Additionally, a rehash of the November news that the Japan government is considering 25 Trillion Japanese yen (JPY) economic stimulus package, as per the NHK, recently crossed the wires while helping the pair.

Moving on, a lack of major data will keep the market’s attention on the trade/political headlines.

Technical Analysis

The quote stays shy of visiting 110.00 and can drop back to mid-November lows near 108.20 on the break of 21-day Simple Moving Average (SMA) level of 108.95.

additional important levels

Overview
Today last price 109.02
Today Daily Change -0.43
Today Daily Change % -0.39%
Today daily open 109.45
 
Trends
Daily SMA20 108.94
Daily SMA50 108.42
Daily SMA100 107.76
Daily SMA200 108.92
 
Levels
Previous Daily High 109.67
Previous Daily Low 109.4
Previous Weekly High 109.67
Previous Weekly Low 108.63
Previous Monthly High 109.67
Previous Monthly Low 107.89
Daily Fibonacci 38.2% 109.5
Daily Fibonacci 61.8% 109.57
Daily Pivot Point S1 109.34
Daily Pivot Point S2 109.23
Daily Pivot Point S3 109.07
Daily Pivot Point R1 109.62
Daily Pivot Point R2 109.78
Daily Pivot Point R3 109.89

 

 

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By Anil Panchal

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