USD/JPY nudges a little higher on the session

The pair fell off hard earlier in the week as the dollar was punished amid the de-escalation of the Iran-Israel conflict, adding to a dovish tilt from Fed’s Bowman here. It triggered a straightforward decline from 148.00 with the low touching around 144.50 in overnight trading. So far today, we’re seeing a bit of a retracement to that with a push back up to 145.60 levels.

Of note, the pair has moved back up above 145.00 but more notably its 200-hour moving average (blue line) at 145.15. That is now allowing room for buyers to maneuver closer towards the 100-hour moving average (red line) at 145.70. Keep below that and the near-term bias stays more neutral. But break above that, and the near-term bias turns back to being more bullish.

Despite the technical bias above though, the 38.2 Fib retracement level at 145.85 and some offers lined up closer to 146.00 might help to still limit upside for the pair today.

We’re not likely going to get anything new from Powell’s second day of testimony in Congress later. So, all eyes will be on US data tomorrow before month-end considerations start to factor into play.

The move higher in USD/JPY looks to be just that little bit of retracement with little else going on in broader markets.

EUR/USD is flattish at 1.1598 with the dollar also not really doing much elsewhere across the board. Meanwhile, 10-year Treasury yields are also seen flat at 4.295% while S&P 500 futures are also flat on the day and not hinting at much.

This article was written by Justin Low at www.forexlive.com.