USD/JPY Analysis: barely holding above 106.00

Valeria Bednarik FXStreet

USD/JPY Current Price: 106.19

Japan´s manufacturing activity remained in contraction territory in August.
Wall Street futures down, anticipating a sour start in the Asian session.
USD/JPY maintains the bearish tone, steeper decline once below 105.60.

The USD/JPY pair traded between 105.90 and 106.40 this Monday, unable to find a clear direction but holding above 106.00 at the end of the day. The pair came under selling pressure at the weekly opening as reciprocal tariffs between the US and China came into effect as expected, spurring demand for safe-haven assets, which was anyway limited by a holiday in the US keeping local market’s closed. Equities in Asia closed in the red, European ones in the green, while Wall Street futures are down ahead of the Asian opening. Japan released Monday the Nikkei Manufacturing PMI, now renamed the Jibun Bank Manufacturing PMI, which resulted in August at 49.3, down from 49.5 in July. This Tuesday, the country will release minor money data, which can hardly interfere with sentiment-related trading.

USD/JPY short-term technical outlook

The USD/JPY pair has spent the day see-sawing around the 38.2% retracement of its August decline at 106.30, currently trading a handful of pips below the level. The pair is technically neutral-to-bearish, according to the 4 hours chart, as indicators head nowhere just below their midlines. Also, the price is hovering around the 20 and 100 SMA, both confined to a tight 10 pips’ range. The pair would resume its decline on a break below 106.00, but it will be below the 105.60 support where bears would take over the pair.

Support levels: 106.00 105.60 105.20

Resistance levels: 106.65 106.90 107.20

View Live Chart for the USD/JPY

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

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 climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

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.