USD/JPY Price Analysis: Struggles to capitalize on modest intraday bounce from one-week low

• USD/JPY stages a modest intraday recovery from a one-week trough touched earlier this Tuesday.
• The uptick lacks follow-through in the wake of retreating US bond yields and subdued USD demand.
• The mixed technical setup warrants some caution before positioning for a firm near-term direction.

The USD/JPY pair attracts some buyers near the 148.15 region, or a one-week low touched during the Asian session on Tuesday and climbs to a fresh daily peak in the last hour. Spot prices, however, remain confined in a familiar range held over the past week or so and currently trade around the 148.60-148.65 area, up less than 0.10% for the day.

A generally positive risk tone is seen undermining the safe-haven Japanese Yen (JPY) and turning out to be a key factor lending some support to the USD/JPY pair. The intraday uptick, however, lacks bullish conviction in the wake of subdued US Dollar (USD) demand. Reduced bets for further interest rate hikes by the Federal Reserve (Fed) lead to a further decline in the US Treasury bond yields, which, in turn, keep the USD bulls on the defensive and act as a headwind for the major.

From a technical perspective, the USD/JPY pair now seems to have found acceptance below the 100-period Simple Moving Average (SMA) on the 4-hour chart. Moreover, oscillators on hourly charts are holding in the negative territory, though are yet to confirm a bearish bias on the daily chart. Hence, any subsequent slide is more likely to find decent support near the 148.00 mark and remain limited near the 200-period SMA on the 4-hour chart, currently pegged near the 147.70-147.65 region.

The latter should act as a key pivotal point, below which the USD/JPY pair is likely to accelerate the fall towards the 147.30 area, or the lowest level since September 14 touched last Tuesday. This is followed by the 147.00 round figure, which if broken will suggest that spot prices have topped out in the near term and pave the way for some meaningful depreciating move.

On the flip side, any subsequent move up might now confront a stiff barrier near the 149.00 mark ahead of the 149.30-149.35 supply zone. A sustained strength beyond could allow the USD/JPY pair to aim back to conquer the 150.00 psychological mark or the potential intervention level. Some follow-through buying will confirm a fresh breakout and lift spot prices towards the 151.00 round figure en route to the 152.00 neighbourhood, or a multi-decade high touched in October 2022.

USD/JPY 4-hour chart

Technical levels to watch