USD/JPY recovery attempt remains capped below 147.00

• US recovery loses steam with bulls capped at 147.00
• The cautious market mood keeps the safe-haven Yen near recent highs.
• Hopes that the BoJ will exit its ultra-loose policy in 2024 are likely top support the Yen. 

The US Dollar is licking its wounds near three-month lows at 146.25, as the recovery attempts seen earlier on Monday have failed to extend above 147.00.

The yen refuses to give way amid cautious markets

Price action is moving within a narrow range, with buyers defending the 146.25/45 area as market sentiment falters. The risk sentiment seen on Friday, following Fed Powell’s comments has turned into caution, as the market turns its focus towards a string of key US data, which will provide more cues into the Federal Reserve’s monetary policy.

Beyond that, the market is increasingly convinced that the BoJ will start exiting its ultra-loose monetary policy, which is cushioning the Yen’s downside attempts.

Technical indicators show the broader downside trend intact, with the 147.05 resistance level closing the path to last week’s highs at 148.30 and 148.85. Supports are 146.50 and 145.95.

Technical levels to watch