USD/JPY analysis: bearish case continues building up

Valeria Bednarik FXStreet

USD/JPY Current price: 111.90

Japanese yen soared on falling US Treasury yields.
Sour tone of worldwide indexes keeping the USD/JPY near its lows.

The USD/JPY pair spent the day in a tight range above 112.00, resuming its decline at the end of the day to a fresh multi-week low of 111.82, as US indexes accelerated their declines. The pair came under pressure at the beginning of the day with risk aversion taking over following comments from US President Trump, who once again criticized the Fed's tightening policy, by saying the central bank is going "loco." US Treasury yields retreated sharply on his words, adding to yen's momentum. US softer-than-expected inflation maintained the pair subdued, despite risk-off sentiment cooled partially during US trading hours. Japan released the September Domestic Corporate Goods Price Index, up by 0.3% MoM and by 3.0%. The country will release some minor money data this Friday that hardly reaches the price.

The short-term picture for the pair indicates that the risk remains skewed to the downside, as in the 4 hours chart, it remained below its 100 and 200 SMA, with this last offering an immediate resistance in the 112.30 region, as the pair has been unable to advance beyond it since the day started. Technical indicators in the mentioned chart have corrected from extreme oversold levels but quickly resumed their declines, now accelerating their downward slopes within extreme levels. The current 111.90 region is a strong static support, and renewed selling interest here favors an extension toward the 111.20 price zone. The bearish pressure could ease on a recovery above 112.60, quite unlikely at this point.

Support levels: 111.90 111.55 111.20

Resistance levels: 112.35 112.60 113.00

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.