USD/JPY analysis: Yen's appreciation set to continue

Valeria Bednarik FXStreet

USD/JPY Current price: 107.35

USD/JPY trading at its lowest since January's flash-crash, more slides likely.
Japan National CPI and the Nikkei Manufacturing PMI to be out this Friday.

The Japanese yen was among the best performers post-Fed, advancing against the greenback to levels not seen since January's flash-crash. The USD/JPY pair has collapsed alongside US Treasury yields following the US Federal Reserve decision to pave the way for a rate cut in the upcoming months. The yield on the benchmark 10-year note fell below 2.0% for the first time since November 2016, to finish the day at 1.98%. The yield for the 2-year note was also lower, settling near its daily low of 1.70%. The Bank of Japan held a monetary policy meeting at the beginning of the day, deciding to maintain its monetary policy unchanged. Comment's from BOJ Governor Kuroda didn't provide surprises, although he sounded cautious, mentioning “significant” downside overseas economic risks. He also referred the available tools the central bank has, but he didn't seem in a hurry to act. Another bearish factor for the USD/JPY pair were mounting tensions between the US and Iran, pushing Wall Street away

During the upcoming Asian session, Japan will release May National Inflation data, foreseen up by 0.7% YoY. Markit will publish the June preliminary Manufacturing PMI, anticipated to come at 50.0 from May's final 49.8.

The USD/JPY pair is bearish according to technical readings in the 4 hours chart, as it is developing far below all of its moving averages, which extend their declines, as technical indicators retain their strong downward slopes within negative levels. The RSI indicator is currently developing in oversold territory, with no signs of downward exhaustion, suggesting selling interest is still strong. The case for a bearish continuation will remain firmly in place as long as the pair remains below 107.80, the former monthly low and the high achieved in the last American session.

Support levels: 107.20 106.90 106.60

Resistance levels: 107.55 107.80 108.20

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 hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.