I’m seeing this neat technical play on the short-term chart of USD/JPY, and the retest might be completed soon!

Are buyers just waiting for this bullish pullback?

But first, here are the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

  • Suez Canal blockage nearly removed as Ever Given has been refloated
  • Australia announces fresh set of lockdowns in Brisbane
  • Australian PM announces cabinet reshuffle
  • Australian jobs stimulus program ends, hiring losses expected
  • Nomura reports losses in its prime brokerage unit
  • Asian shares tick higher while crude oil retreats as Suez Canal ship refloated

Upcoming Potential Catalysts on the Economic Calendar:

  • U.K. mortgage approvals and net lending to individuals reports at 9:30 am GMT
  • FOMC member Waller’s testimony at 4:00 pm GMT

What to Watch: USD/JPY

USD/JPY 1-hour Forex Chart

USD/JPY 1-hour Forex Chart

This pair is in correction mode, as price retreated from the 109.85 high to the 38.2% Fib level.

USD/JPY could dip a little lower to the 50% Fib, which happens to line up with a former resistance area near the 109.00 handle, before buyers return.

Are dollar bulls likely to defend support zones?

Technical indicators seem to suggest so, as the 100 SMA is safely above the 200 SMA to indicate the presence of bullish momentum. At the same time, Stochastic is approaching the oversold region to signal that sellers could take a break soon.

If any of the Fibs are able to keep losses in check, USD/JPY could recover to the swing high and beyond.

There’s not much in the way of top-tier releases in the next sessions, though, as traders might hold out for the leading U.S. jobs indicators and NFP release.

Still, expectations of a much stronger pace of hiring for March might be enough to keep the Greenback afloat throughout the week. Keep in mind that the February report already printed an upside surprise, so another good figure could assure traders that the U.S. economy is recovering from the pandemic.

A bit of risk aversion also seems to be favoring the safe-haven U.S. currency early this week, as traders continue to fret about the new set of lockdown measures and the slow pace of vaccination in several nations.

Losses being reported by some brokerages and investment houses like Nomura and Archegos Capital are also contributing to the risk-off mood so far this week.