USD/JPY Current price: 105.20
- Japanese inflation at factory levels fell by 0.6% YoY in July.
- US annual inflation seen upwardly revised to 1.7% YoY.
- USD/JPY aiming to extend its decline toward the 104.20/30 price zone.
The USD/JPY pair has reached a daily high of 105.58 during Asian trading hours, resuming its decline as Europe came in, on the back of risk aversion. Bond yields continue to fall, with negative yields spreading throughout the Union, and that of the US 10-year Treasury note down to 1.62%. Equities, in the meantime, follow the lead of Wall Street, with all local indexes trading in the red.
The dismal market mood is a combination of trade tensions between the US and China generating a global economic slowdown, rising odds for a hard-Brexit, and worldwide central banks responding to the ongoing uncertainty with more stimulus measures.
Overnight, Japan released the Domestic Corporate Goods Price Index, which remained flat monthly basis in July, and declined by 0.6% when compared to a year earlier, missing the market’s expectations. The Tertiary Industry Index fell in June by 0.1% as expected. The US will publish today the final version of July inflation, seen up by 1.7% YoY vs. the previous estimate of 1.6%. Core CPI is foreseen steady at 2.1%.
USD/JPY short-term technical outlook
The USD/JPY pair held so far above Monday’s multi-month low of 105.04, but trades a few pips above it, maintaining the negative bias according to intraday readings. As said in previous updates, the pair has a long-term support in the 104.20/30 region, and a possible bearish target should the decline extend below the 105.00 figure. In the 4 hours chart, the 20 SMA keeps limiting the upside by heading lower above the current level, and far below the larger ones. Technical indicators in the mentioned chart have resumed their declines within negative levels, although their bearish momentum is limited at the time being. The pair could correct higher if it manages to recover above 105.60, the immediate resistance.
Support levels: 105.00 104.75 104.30
Resistance levels: 105.60 106.00 106.40
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.