USD/JPY analysis: fresh yearly highs and counting

Valeria Bednarik FXStreet

USD/JPY Current price: 114.39

US Treasury yields hit multi-year highs following solid US data.
Wall Street extends rally, DJIA at unchartered territory.

The USD/JPY pair reached fresh 2018 highs on broad dollar's strength and as US Treasury yields soared, with the yield on the 10-year Treasury note hitting 3.17%, its highest level since July 2011, a result of solid US data, which also boosted American indexes, sending the DJIA closer to the 27,000 threshold. Adding pressure on the JPY was the Japanese Nikkei Services PMI, which fell to 50.2 in September, its lowest reading in two years and barely holding in expansionary territory. There won't be relevant macroeconomic releases in the country this Thursday.

Trading near its daily high of 114.44, the pair is poised to extend its advance according to technical readings in the 4 hours chart, as not only the pair gained upward momentum, but also moving averages which anyway remain well below the current level. The Momentum indicator bounced strongly after flirting with its 100 level, while the RSI maintains its bullish slope despite having entered overbought territory. The next big hurdle comes at the 114.70/80 area, where the pair set monthly highs at the end of 2017.

Support levels: 114.05 113.70 113.35

Resistance levels: 114.75 115.00 115.30

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.

Japanese Yen struggles to gather strength as BoJ maintains status quo

USD/JPY trades marginally lower on the day at around 157.50 after the Bank of Japan (BoJ) decided to leave monetary policy settings unchanged at the October meeting. 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 slides below $4,000 as Fed rate hike bets offset falling bond yields and weak USD

Gold attracts some follow-through selling for the second straight day and slides below the $4,000 psychological mark during the Asian session on Friday amid hawkish US Federal Reserve expectations. In fact, US macro data released on Thursday pointed to resilient economic growth and persistent price pressures, solidifying bets for an imminent rate hike in December. This is seen as undermining the non-yielding bullion.

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.