EUR/JPY rebounds from an upside support line

JFD Team JFD

EUR/JPY traded higher on Tuesday, breaking above the downside resistance line drawn from the high of June 5^th. The recent recovery started yesterday, when the rate hit support at the crossroads of the 119.30 level and the upside support line drawn from the low of May 6^th. Thus, bearing in mind that it continues to trade above that line, and also that it broke the short-term downside one, we would consider the near-term picture to be positive.

If the bulls are willing to stay behind the steering wheel, we may see them soon emerging above the high of June 17^th, at 121.25, a move that could pave the way towards the high of the day before, at around 122.10. Another break, above 122.10, may carry larger bullish implications, perhaps setting the stage for extensions towards the 123.50 zone, near the inside swing low of June 5^th.

Looking at our short-term oscillators, we see that the RSI stands above 50 and points up, while the MACD, already above its trigger line, has just poked its nose above zero. Both indicators detect positive momentum and corroborate our view for some further advances in the near term.

In order to start examining whether the bears have stolen the bulls’ swords, we would like to see a dip below 119.30. Such a move would not only confirm a forthcoming lower low, but would also take the rate below both the aforementioned diagonal lines. The bears may then get encouraged to shoot for the low of May 28^th, at 118.50, the break of which may extend the decline towards the low of the day before, at 117.70.

JFDBANK.com - One-stop Multi-asset Experience for Trading and Investment Services

Author

JFD Team

JFD

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

Week ahead: US NFP and CPI data to shake Fed cut bets, Japan election looms

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.