Asian Market Weighs On The US Dollar

Retreats as Asian Sentiment Strengthens

USD/JPY remains under pressure, retreating 0.15% to 141.25 intraday, as the risk-on sentiment in the Asian market weighs on the US Dollar. However, the Yen pair finds some support from key technical levels and cautiousness ahead of the monetary policy meetings of the US Federal Reserve and the Bank of Japan (BoJ) this week.

Technical Indicators Hint at Downside

Technical indicators suggest potential further downside for USD/JPY, as the Relative Strength Index (RSI) retreats from the overbought territory and the Moving Average Convergence Divergence (MACD) indicator hints at a possible bearish crossover.

Key Support Holds Firm

A two-month-old horizontal support area of around 141.00 acts as immediate support for the USD/JPY pair. Even if the price breaks below this level, the convergence of the 100 and 200 Exponential Moving Averages (EMA) around 140.80 presents a significant obstacle for the bears.

Resistance Levels Pose Challenges for Recovery

On the upside, potential resistance levels for USD/JPY recovery moves include the recent peak at 141.95 and the 61.8% Fibonacci retracement level of the pair's June 30 to July 14 downside, around 142.05. Further resistance can be expected at the July 10 swing high of approximately 143.00, followed by the monthly top near 145.00.

Traders Eye Risk Sentiment and Central Bank Meetings 

Forex and crypto traders should closely monitor the developments in the risk sentiment and upcoming monetary policy announcements from the US Federal Reserve and the Bank of Japan. These events are likely to have a significant impact on the USD/JPY pair's direction in the near term. Technical levels such as the 140.80 support and the resistance levels at 142.05 and 143.00 could play crucial roles in traders' decision-making. Additionally, global economic conditions and geopolitical events may further influence Forex market participants' strategies and trading positions related to the USD/JPY currency pair.