|

USD/JPY analysis: bearish momentum to increase below 109.20

USD/JPY Current price: 109.88

  • The yield on the benchmark 10-year Treasury note peaked for the day at 2.95%, retreating later to 2.89%.
  • Safe-haven yen backed by global retaliation against US Trump's tariffs on aluminum and steel.

The Japanese yen gained on the back of lingering worries over global trade, resulting in the USD/JPY pair breaking below the 110.00 level after hitting a daily high of 110.75. The pair replicated yields' behavior, as US Treasury yields surged at the beginning of the day but eased after Wall Street's opening, settling below Wednesday's closing levels. The yield on the benchmark 10-year Treasury note peaked for the day at 2.95%, retreating later to 2.89%. Comments from the Chinese Commerce Ministry who said that he has no choice in implementing new tariffs on US goods, as the unpredictable US behavior needs strong responses, and tariffs on US products imposed by the EU and Turkey so far, fueled demand for the safe-haven currency. The pair trimmed Wednesday's gains and is back trading in the 109.80 area, at risk of falling further, as in the 4 hours chart, the pair is battling with converging 100 and 200 SMA, while technical indicators turned sharply lower, the Momentum currently pressuring its mid-line but the RSI indicator already at 40. A slide below 109.55, the immediate support, should lead to a test of 109.20, a critical support now, as below it bulls will likely give up resulting in a steeper decline ahead.

Support levels: 109.55 109.20 108.80

Resistance levels: 110.15 110.45 110.90  

View Live Chart for the USD/JPY

Author

Valeria Bednarik

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.

More from Valeria Bednarik
Share:

Editor's Picks

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.