USDJPY has been trading lower as of late. The pair halted previous upward move at the 200-session moving average last week and a pullback was launched as issues in the US banking sector began to mount. Move on the pair was driven, on one hand, by drop in US yields and resulting USD weakening, and on the other hand by strengthening of JPY which benefited from safe haven flows. As a result, the pair is already trading around 3% below a local high reached on March 9, 2023. USDJPY tested support zone ranging around 133.00 handle, and marked with 50-sesion moving average (green line) and 23.6% retracement of the downward impulse launched in late-October 2022, but failed to break below it yesterday. An attempt to launch a recovery move can be spotted today with the pair bouncing off the aforementioned 133.00 zone. A near-term resistance zone to watch can be found around 2% above the current market quote and is marked with the 38.2% retracement in the 136.75 area.
When it comes to potential near-term drivers for USDJPY, there are few to focus on. Firstly, developments in the US banking sector should be watched closely as they have significantly lower market expectations for rate hikes in the United States. Secondly, US CPI and retail sales data for February will be released today at 12:30 pm GMT and tomorrow at 12:30 pm GMT, respectively. Those readings will further shape expectations ahead of next week's FOMC decision. Last but not least, Bank of Japan is set to releases minutes from its latest meeting during the upcoming Asian session (around 11:50 pm GMT today) but this piece of data rarely tends to have a major impact on the markets.
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Source: xStation5
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