FxWirePro: USD/JPY slips lower from session highs, cautious optimism seen across markets

Chart - Courtesy Trading View 

USD/JPY was trading 0.02% lower on the day at 131.84 at around 05:10 GMT, safe haven dollar on the back foot amid a rebound in Treasury yields.

Over the weekend, the Federal Reserve, European Central Bank, Bank of England, Swiss National Bank, Bank of Canada and Bank of Japan announced joint action to enhance market liquidity.

Volatility subsides but fears remain among traders even as major central banks seek to reassure markets.

The US Dollar Index (DXY) muted around 103.80 as markets prepare for action ahead of the interest rate policy by the Federal Reserve (Fed).

USD/JPY is extending weakness into daily cloud, price action capped below 5-DMA, slips further into daily cloud.

Technical indicators support further downside in the pair. Oscillators are sharply lower and volatility is high and rising.

Major Support Levels: 130.74 (Lower BB), 128.08 (Feb 2023 low)

Major Resistance Levels: 132.99 (5-DMA), 134.50 (200H MA)

Summary: USD/JPY trades with a bearish technical bias. The major is poised to extend weakness. Cloud base is strong support at 130. Break below will drag the pair lower.