FxWirePro: USD/JPY opens the week with a bearish gap, Dollar sinks as US intervenes on SVB collapse

Chart - Courtesy Trading View 

USD/JPY was trading 0.78% lower on the day at 134.00 at around 04:50 GMT. The pair is extending weakness for the 3rd consecutive session, slips lower after rejection at 200-DMA.

The U.S. dollar slumped on Monday as authorities stepped in to cap the fallout from the sudden collapse of Silicon Valley Bank.

The U.S. government announced several measures early on Monday so as to make additional funding available through a new Bank Term Funding Program. 

SVB collapse led investors to speculate that the Fed would now hesitate to hike interest rates by a super-sized 50 basis points this month. 

Risk-on mood joins easing hawkish Fed bets also drag the US dollar lower across the board. Dollar index (DXY) was trading 0.74% lower on the day at 103.86 at the time of writing.

Investor focus will now be on Tuesday's inflation data to gauge how hawkish the Fed is likely to be.

Data released on Friday showed US Nonfarm Payrolls (NFP) grew more than 205K expected to 311K in February, versus 504K (revised).

The Unemployment Rate rose to 3.6% for the said month compared to 3.4% expected and prior. Further, the Average Hourly Earnings rose on YoY but eased on monthly basis.

Technical Analysis:

- USD/JPY holds supports at daily cloud, break below to see more weakness

- Price action has broken below 55-EMA and 200H MA

- MACD confirms bearish crossover on signal line, GMMA has turned bearish on the daily charts

- Momentum is bearish, RSI is sharply lower and below 50 

Major Support and Resistance Levels:

Major Support: 133.03 (Lower BB), Major Resistance: 134.93 (21-EMA)

Summary: USD/JPY was trading with a bearish bias. Daily cloud is offering minor support, break below will drag the pair lower.