USDJPY TECHS: Key Resistance Intact For Now

• RES 4: 1.2880 2.0% 10-dma envelope
• RES 3: 1.2811 High Dec 6 ‘24
• RES 2: 1.2767 50.0% retracement of the Sep 26 ‘24 - Jan 13 bear leg 
• RES 1: 1.2716 High Feb 26
• PRICE: 1.2710 @ 16:23 GMT Mar 3 
• SUP 1: 1.2538 50-day EMA     
• SUP 2: 1.2440 Low Feb 13
• SUP 3: 1.2333 Low Feb 11 and a key support  
• SUP 4: 1.2249 Low Feb 3    

A bullish trend condition in GBPUSD remains intact - for now - and this suggests the latest pullback is likely a correction. Note that moving average studies have recently crossed into a bull-mode position, highlighting a potentially stronger bull cycle. Initial firm support to watch is 1.2538, the 50-day EMA. A resumption of gains would open 1.2767, the 50.0% retracement of the Sep 26 ‘24 - Jan 13 bear leg.

• -10,000 FVM5 108-02.25, sell through 108-02.5 post time bid at 1316:34ET, DV01 $442,000. The 5Y contract trades 108-02.75 last (+4.75)

• Weaker-than-expected growth and employment metrics in Monday’s release of ISM manufacturing data has weighed heavily on the greenback, culminating in the USD index declining over 1%. Gains across G10 have been broad based, although tariff sensitive currencies such as MXN, CAD and CNH are underperforming as the looming tariff deadlines maintain a sense of trepidation.
• The Japanese yen saw another volatile session, with the late European risk-on tone prompting a near 1% rally from the lows in USDJPY. Even more notable were the ~1.65% recoveries for the likes of EURJPY and GBPJPY which are now consolidating 0.85% advances on the session.
• Data today has supported a strong rally for EURUSD, which has risen 1.15%. Eurozone flash readings of CPI and core CPI coming in a tenth above consensus estimates helped boost the Euro, and the more constructive price action for European equities exacerbated the risk-on momentum.
• Today’s 1.15% advance has swiftly erased the majority of the three session decline seen late last week, and in the process we are flirting once again with the 1.05 handle. This leaves spot just 30 pips away from a cluster of resistance, a collection of daily highs between 1.0520/33 which will provide the key focus ahead.
• Also standing out in the G10 currency space on Monday has been the significant weakness for NOKSEK, following the breach of multi-year support at 0.9500. The cross is now 1.45% lower today at 0.9432 as we approach the APAC crossover. The likely close below 0.9500 represents an important bearish development and signals scope for a more protracted selloff towards the November 2020 low at 0.9274. EURSEK (-1.14%) meanwhile is through a cluster of support around 11.14 and is rapidly approaching the December 2023 low at 11.0030, another important chart point.
• On Tuesday, BOJ Governor Ueda is scheduled to deliver opening remarks at an event hosted by the IMF, in Tokyo. Elsewhere, the RBA minutes and Australia Jan retail sales will be released.