The USD/JPY is trading at the 133.88 price level after recording negative intraday movement on Wednesday. The pair opened trading at 134.22, representing the previous day’s close, and fluctuated between 133.82 lows and 135.1 highs. The overall price change for the intraday range stands at -0.03.

The US 10-year treasury bond is currently at 3.67%, which diminished the returns of Tuesday’s rebound, while the two-year securities rose 4.32% at the time of writing. It is important to note that the 10-year securities drop on Tuesday is the largest in 5 weeks, while the short-term bond rebounded from a half-year low.

The Bank of Japan’s dovish policy minutes supports the pair’s upward movement. According to the central bank’s minutes, monetary support will continue, and easing is important to avoid similar scenarios to the banking turmoil in the US.

Technical Analysis of the USD/JPY pair

The pair is trading above the 50 SMA at 133.87, a bullish signal in the short term. The pair is also trading above the 38.2% Fibonacci level at 134.19 and did not reach the 61.8% Fibonacci level, suggesting some support at the 38.2% retracement level.

The daily chart’s RSI shows neutral momentum as the pair hovers on the 50 mark. However, the market may face some resistance at the 135.8 to 136.95 psychological price levels.

The daily pivot maintains course at the 134.05 support level, found within the 133.20 to 131.33 range in the psychological price level. If the pair can break above this pivot, it may run for the resistance levels. However, if the pair breaks below the levels, it will trigger a test of the support levels.

GBP/USD Falls Below 1.2100

The GBP/USD pair is experiencing downward pressure following an uptick in the 1.2180 regions and turning over for the second consecutive day on Wednesday. The spot price moved below the 1.210 mark in the first session, with sellers looking to extend the overnight retracement decline from the 1.2200 regions, representing a one-month high.

The British pound is underperforming against the US dollar due to the anticipation of the Bank of England pausing rate hikes, which acts as a headwind for the pair. The UK Office of National Statistics reports that the annual growth in the average pay, including bonuses, declined from 5.7% in the last three months of 2022 to 6% in February.

This data indicates that UK wages are easing, which could allow the bank to adopt a dovish stance amid a bad economic outlook. From the technical indicators, the GBP/USD pair is trading below the 50-day simple moving average (SMA) at 1.2150, a bearish signal in the short term.

The daily chart’s Relative Strength Index (RSI) fluctuates around 40, indicating neutral momentum. However, the market may see some resistance at the psychological price levels of 1.2200 and 1.2300. The daily pivot maintains course at the 1.2150 support level, found at the 1.2090 to 1.2040 range in the psychological price level.

If the pair breaks below this pivot, it may trigger a test of the support levels. Finally, the US dollar is finding support from the further upticks in treasury bonds, as mentioned earlier, which is boosting bets for a 0.25% rate hike at the March 22 meeting.

These expectations were fueled by the US CPI report released last Tuesday, which showed that inflation is not easing as quickly as expected.