USD/JPY unable to consolidate above 115.50, loses momentum
31.01.2022, 15:55

USD/JPY unable to consolidate above 115.50, loses momentum

  • Japanese yen recovers versus dollar but drops against most G10 currencies.
  • DXY drops after five-day rally, down 0.38%.
  • USD/JPY heads for the third consecutive daily close near 115.30.

The USD/JPY pair is trading in neutral territory on Monday during the American session. Earlier it peaked at 115.59 but failed again to hold above 115.50 and lost momentum. The US dollar is pulling back after rising sharply last week.

US yields are modestly higher on Monday, with the 10-dayer at 1.79% after making a spike to 1.81% while the 30-year stands at 2.10%, down from 2.13%. In Wall Street, equity prices are rising. The Nasdaq gains 1.65% and the Dow Jones 0.04%.

Economic data released on Monday showed the Chicago PMI rose in January from 64.3 to 65.2 against expectations of a decline to 61.7. The Dallas Fed Manufacturing Business Index dropped from 7.8 to 2, versus market consensus of 9.9. The key report of the week is the official employment report due on Friday.

The greenback opened the week under pressure, correcting lower after the rally following the FOMC meeting that triggered expectations of four to five rate hikes from the Fed during 2022.

The positive momentum of the USD/JPY is easing as it remains unable to hold firm above 115.50. If the dollar manages to confirm levels above the mentioned area, it would point to further gains a possible test of 116.00. On the flip side, the correction could extend to 114.80/85 (20-day moving average) if it breaks below 115.00.

Technical levels

 

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