USD/JPY analysis: modest bounce from key 111.60 region, but still bearish

Valeria Bednarik FXStreet

USD/JPY Current price: 111.85

The USD/JPY pair fell below the 112.00 level for the first time since early February, trading as low as 111.68 before bouncing some 20 pips. The pair has spent most of the first half of the day consolidating within its Monday's range, but broke south after Wall Street's opening, as stocks plunged to fresh 4-week lows, whilst Treasury yields followed suit. US government bonds surged as the dollar came under pressure, leading to a sharp retracement in yields. The 10-year note yield sunk to 2.42% from previous 2.47%, while the 30-year benchmark is down to 3.04% from 3.09% previously. Japan will release its February trade balance figures and the Minutes of the latest BOJ's meeting during the upcoming Asian session, which may lead to further gains in the yen. From a technical point of view, the bearish potential remains strong, albeit the pair has a major support around 111.65, from where it bounced several times during the past two months. Nevertheless, and in the 4 hours chart, the price is well below its 100 and 200 SMAs that anyway remain flat, while technical indicators remain within negative territory, with the RSI now consolidating around 28, somehow reflecting easing selling interest. At the same time, the pair is unable to recover above 112.00, the 38.2% retracement of late 2016 rally, now the immediate resistance.

Support levels: 111.65 111.20 110.70

Resistance levels: 112.00 112.50 112.90

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 climbs to daily highs on US CPI

EUR/USD now accelerates it rebound and flirts with the 1.1880 zone on Friday, or daily highs, all in response to renewed selling pressure on the US Dollar. In the meantime, US inflation figures showed the headline CPI rose less than expected in January, removing some tailwinds from the Greenback’s momentum.

GBP/USD clings to gains above 1.3600

GBP/USD reverses three consecutive daily pullbacks on Friday, hovering around the low-1.3600s on the back of the vacillating performance of the Greenback in the wake of the release of US CPI prints in January. Earlier in the day, the BoE’s Pill suggested that UK inflation could settle around 2.5%, above the bank’s goal.

Gold: Upside remains capped by $5,000

Gold is reclaiming part of the ground lost on Wednesday’s marked retracement, as bargain-hunters seem to have stepped in. The precious metal’s upside, however, appears limited amid the slightly better tone in the US Dollar after US inflation data saw the CPI rise less than estimated at the beginning of the year.