USD/JPY off lows, still under 113.00 after US House passes tax cuts bill
- Spot fails to recover key levels, risks remain to the downside.
- USD rises marginally after House of Representatives passes tax cut bill.
The USD/JPY pair peaked during the European session at 113.33 and then pulled back below 113.00. The recovery was short-lived and at the moment of writing was trading at 112.95, around Thursday’s close.
Limited moves, still pointing lower
After the beginning of the US session USD/JPY bottomed at 112.72. US data failed to boost the pair. The US House of Representatives just passed a $1.5 trillion tax cut by 227-205. The Senate is still preparing it own bill.
USD/JPY moved modestly to the upside, still under 113.00. The greenback rose marginally after the vote. The limited price action was also seen in the bond market. The 10-year yield remained around 2.35%.
Technical outlook
“The 4 hours chart shows that the pair was unable to recover above the 200 SMA, while technical indicators have bounced modestly within bearish territory, but remain well below previous highs, all of which maintains the risk towards the downside”, said Valeria Bednarik, Chief Analyst at FXStreet.
USD/JPY failed to recover above 113.20 and remains under 113.00; both relevant technical areas. As long as it holds at current levels the bearish tone is likely to prevail. To the downside, support levels are seen at 112.40/50 (weekly low), 112.00 and then October lows at 111.60/65.