USD/JPY Rises As Hawkish Fed Resonates
USD/JPY
The US Federal Reserve continues to beat its hawkish drum, with Chair Powell at the forefront. On his US Senate testimony on Tuesday he had hinted towards a faster tapering path and said it is probably a good time to "retire" the term "transitory", while yesterday he doubled down with his comments on the House of Representatives.
As such, the pair showed resilience on Wednesday risk-off wave, on news of the first confirmed case of Omicron in the United States. [1]
Risk seems to be at a better place today and recent Fed commentary boosts US treasury yields and the US Dollar, bringing USD/JPY at a critical technical conjuncture. The pair managed to defend 112.92-71 area from our latest analysis, as the Daily Ichimoku cloud provides support, rebounding from the poor start to the week.
Past Performance: Past Performance is not an indicator of future results.
This gives it the chance to take another crack at the EMA100 and the key 113.50-68 area, but a break above is needed, for the downward pressure to ease. Such a move will allow it to look to 113.92-114.00, but sustained improvement is likely needed for such a recovery.
Past Performance: Past Performance is not an indicator of future results.
Despite today's gains and the fact that it defended the aforementioned 112.92-71 level, Wednesday closed below 38.2% Fibonacci of the "August Low/November multi-year High" advance and the upper border of the Ichimoku cloud. Furthermore, uncertainty around Covid remains high and below the EMA100, the pair is in a precarious position. Given these factors, risk for a return towards last month lows (112.52) persists, but may be early to talk for a breach of 112.11.
Market participants will remain on the lookout for fresh Omicron news, while from the economic calendar US Jobless Claims stand out, ahead of Friday's Non-Farm Payrolls.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 20 Apr 2026 https://www.cdc.gov/media/releases/2021/s1201-omicron-variant.html |
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