USD/JPY analysis: yen poised to extend gains

Valeria Bednarik FXStreet

USD/JPY Current price: 109.55

Japanese April National inflation seen steady at 0.4% YoY.
US T-yields collapsed on growth concerns, fueling demand for safe-haven yen.

The USD/JPY pair fell below the 110.00 figure to trade as low as 109.45 amid broad dollar's decline following worse-than-expected US data and plummeting US government debt yields on a run to safety. The 10-year note yield collapsed to 2.29%, its lowest level in over a year-and-a-half, as Markit May preliminary PMI showed that growth in business activity slowed sharply in most major economies. The Japanese Nikkei Manufacturing PMI came in at 49.6, according to preliminary estimates for May, falling into contraction territory and missing the market's expectations of 50.2. The country will release April National Inflation early Friday seen up by 0.4% when compared to a year earlier.

The USD/JPY pair trades a couple of pips above the daily low ahead of the Asian opening, having declined below the 61.8% retracement of the latest bullish run measured between 109.01 and the 110.66 high at 109.65, the immediate resistance. In the 4 hours chart, the price is far below its 20 and 100 SMA, both converging around 110.20, the Momentum indicator maintaining a strong bearish slope and the RSI trying to stabilize around 34, all of which keeps the risk skewed to the downside for the upcoming sessions.

Support levels: 109.40 109.15 108.80

Resistance levels: 109.65 109.90 110.20

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 holds firm near 1.1850 amid USD weakness

EUR/USD remains strongly bid around 1.1850 in European trading on Monday. The USD/JPY slide-led broad US Dollar weakness helps the pair build on Friday's recovery ahead of the Eurozone Sentix Investor Confidence data for February.

GBP/USD holds medium-term bullish bias above 1.3600

The GBP/USD pair trades on a softer note around 1.3605 during the early European session on Monday. Growing expectation of the Bank of England’s interest-rate cut weighs on the Pound Sterling against the Greenback.

Gold remains supported by China's buying and USD weakness as traders eye US data

Gold struggles to capitalize on its intraday move up and remains below the $5,100 mark heading into the European session amid mixed cues. Data released over the weekend showed that the People's Bank of China extended its buying spree for a 15th month in January. Moreover, dovish US Fed expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.

Cardano steadies as whale selling caps recovery

Cardano (ADA) steadies at $0.27 at the time of writing on Monday after slipping more than 5% in the previous week. On-chain data indicate a bearish trend, with certain whales offloading ADA. However, the technical outlook suggests bearish momentum is weakening, raising the possibility of a short-term relief rebound if buying interest picks up.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.