USD/JPY analysis: bearish extension below 113.60

Valeria Bednarik FXStreet

USD/JPY Current price: 113.72

US Treasury yields' rally overshadowed by plummeting equities.
Japan and the US having banks' holidays at the beginning of the week.

The USD/JPY pair closed the week unchanged at around 113.70 as soft US employment data and the slump in worldwide equities offset rallying government bond yields. The pair reached 114.54 early Thursday, following comments from the Fed's head, Powell, suggesting more rate hikes in the horizon for the upcoming years, retreating from such level as equities suffered big from the run in Treasury yields which spurred fears of another crisis in EM. Long-term US Treasury yields reached multi-year highs, with the yield on the benchmark 10-year Treasury note peaking at 3.25% to close the week at 3.23%. Both countries are having local holidays on Monday which may result in the pair consolidating in a tight range during the upcoming sessions.

Technically, the pair remains in bullish ground according to the daily chart, as it keeps developing below its moving averages, with the 100 DMA heading north over 200 pips below the current level. Technical indicators in the mentioned chart have retreated from overbought readings, maintaining downward slopes but far above their midlines, leaving doors open for further slides ahead. In the 4 hours chart, the pair is trading above firmly bullish 100 and 200 SMA, while technical indicators entered in negative ground with strong downward slopes, in line with the longer term perspective.

Support levels: 113.60 113.30 112.95

Resistance levels: 114.00 114.40 114.75

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.

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

USD/JPY declines toward 157.00 as Yen gathers strength after BoJ

The Japanese Yen gathers strength on Friday, with USD/JPY falling toward 157.00 in the second half of the day. The Bank of Japan (BoJ) decided to leave monetary policy settings unchanged at the October meeting, as expected. In the post-meeting press conference, BoJ Governor Ueda reiterated that they will continue to raise the policy rate and adjust the degree of monetary easing in reponse to economic activity and prices.

Gold slips below $4,000 despite risk-off mood as hawkish Fed expectations weigh

Gold (XAU/USD) remains under pressure on Friday, slipping to $3,965 during Asian trading hours, its lowest level since July. The metal struggles despite a risk-off mood across markets, as expectations of further Federal Reserve (Fed) interest rate hikes continue to dominate price action, leaving Gold on track to end the month in negative territory. At the time of writing, XAU/USD trades around $3,979, down nearly 1% on the day.

The hawkish Fed can't lift the US Dollar anymore

About three more Federal Reserve hikes are already priced in, and the central banks behind the Euro, Pound, Yen and Loonie are raising rates or about to. That leaves the US Dollar Index with little to gain if the Fed keeps leaning toward higher rates.

Binance hack shakes crypto, but XRP pullback may not be so bearish

Crypto markets were hit by a big headline overnight. Binance confirmed a security incident in which a compromised engineer's laptop led to unauthorized withdrawals, with an estimated impact of around $6.3 billion. About $3 billion has been frozen so far, Binance says it will cover the losses, and withdrawals were paused while security checks are completed.

A hot US economy is supposed to sink Gold. It didn't. Here's why

Gold (XAU/USD) remains under pressure near $4,000, as stronger-than-expected United States (US) economic data reinforce expectations of another Federal Reserve (Fed) interest rate hike in December. Economic growth is accelerating, inflation remains elevated, and borrowing costs could rise further.