USD/JPY analysis: bulls not willing to give up despite risk-off

Valeria Bednarik FXStreet

USD/JPY Current price: 110.22

US Treasury yields, equities´ pullback sent the USD/JPY sub-110.00 intraday.
FOMC's optimistic stance did little for equities, mute reaction from USD/JPY.

The USD/JPY pair fell to 109.55 its lowest in over a week, as US Treasury yields and worldwide equities fell sharply on the back of US President Trump comments late Tuesday, after he said that there was a "substantial chance" his summit with North Korean Kim Jong-un won't take place in June, adding that he was "not satisfied" with the recent trade talks with China and that the recent developments were just a start. Macroeconomic data released in Japan at the beginning of the day was disappointing, as the preliminary Japanese Nikkei Manufacturing PMI for May released at the beginning of the day resulted at 52.5, missing market's expectations of 53.6, while the All Industry Activity Index was unchanged in March. US data, on the other hand, indicated that the economy keeps growing at a healthy pace. FOMC Minutes somehow hinted a rate hike for June, but the reaction was mute in equities and therefore in the USD/JPY pair. Japan will release its Coincident Index and the Leading Index for March during the upcoming session, although yields and equities will likely lead the way. The pair is now trading at around 110.20, recovering above the daily ascendant trend line and the 100 SMA in the 4 hours chart, both pierced early Europe. Technical indicators in the mentioned chart have managed to bounce from overbought levels, but are rather reflecting the ongoing correction than suggesting more gains ahead. Nevertheless, if the pair manages to extend its recovery beyond 110.45, May 15th high, chances are of further recoveries ahead for the upcoming sessions.

Support levels: 109.90 109.55 109.15

Resistance levels: 110.45 110.80 111.20

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 struggles near 1.1850, with all eyes on US CPI data

EUR/USD holds losses while keeping its range near 1.1850 in European trading on Friday. A broadly cautious market environment paired with a steady US Dollar undermines the pair ahead of the critical US CPI data. Meanwhile, the Eurozone Q4 GDP second estimate has little to no impact on the Euro.

GBP/USD recovers above 1.3600, awaits US CPI for fresh impetus

GBP/USD recovers some ground above 1.3600 in the European session on Friday, though it lacks bullish conviction. The US Dollar remains supported amid a softer risk tone and ahead of the US consumer inflation figures due later in the NA session on Friday.

Gold remains below $5,000 as US inflation report looms

Gold retreats from the vicinity of the $5,000 psychological mark, though sticks to its modest intraday gains in the European session. Traders now look forward to the release of the US consumer inflation figures for more cues about the Fed policy path. The outlook will play a key role in influencing the near-term US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion.

US CPI data set to show modest inflation cooling as markets price in a more hawkish Fed

The US Bureau of Labor Statistics will publish January’s Consumer Price Index data on Friday, delayed by the brief and partial United States government shutdown. The report is expected to show that inflationary pressures eased modestly but also remained above the Federal Reserve’s 2% target.

The weekender: When software turns the blade on itself

Autonomous AI does not just threaten trucking companies and call centers. It challenges the cognitive toll booths that legacy software has charged for decades. This is not a forecast. No one truly knows the end state of AI.

Solana Price Forecast: Mixed market sentiment caps recovery

Solana (SOL) is trading at $79 as of Friday, following a correction of over 9% so far this week. On-chain and derivatives data indicates mixed sentiment among traders, further limiting the chances of a price recovery.