USD/JPY Current price: 110.53
- Japanese data points to a steeper economic slowdown at the beginning of 2019.
- Rallying equities underpin the USD/JPY, adding to broad dollar's strength.
The USD/JPY pair peaked at 110.65 during the Asian session, still lead by broad dollar's demand. Risk-positive news helped the pair advance, although the BOJ offered to buy ¥180B of 10- to 25-year JGBs, down from ¥200B last week. Such a movement usually triggers speculation that the central bank may be considering reducing its stimulus although Governor Kuroda has repeated multiple times that is part of its current policy aimed to maintain the yield curve under control.
Equities were sharply up in Asia, while European indexes follow suit, following headlines that the US Congress has reached an agreement in principle, aimed to avoid another government shutdown. US President Trump signed a bill to fund the government for three weeks, which will end this Friday. Now, Trump must approve whatever deal lawmakers made, to keep the ball rolling. No detail on the agreement has been released and is yet to be seen what they've decided about the border wall.
Japanese data released at the beginning of the day weighed on the yen, as the January preliminary estimate of January Machine Tool Orders fell by 18.8% YoY, following 18.3% decline in December, while the monthly Tertiary Industry Index was down by 0.3%. There are no relevant macroeconomic news scheduled in the US today, although Fed's head Powell is scheduled to deliver r a speech titled "Economic Development in High Poverty Rural Communities" at the Hope Enterprise Corporation Rural Policy Forum, in Mississippi.
The pair retains its gains, trading a few pips below its daily high, and with room to extend its advance, despite technical indicators in the 4 hours chart stand in overbought territory, a mere consequence of the previous range. In the mentioned chart, the pair is also above its moving averages, with the 100 SMA advancing above the 200 SMA, leaning the scale to the upside, while technical indicators lose upward strength, holding in overbought levels. The pair has an immediate support around 110.45, and the upward potential will prevail as long as above the level.
Support levels: 110.45 110.10 109.85
Resistance levels: 110.65 111.00 111.45
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD: The crucial resistance level will emerge at the 1.0790–1.0800 region
The EUR/USD pair trades on a softer note near 1.0775 during the early European hours on Friday. The downtick of the major pair is supported by the renewed US Dollar demand amid hawkish comments from Federal Reserve officials.
GBP/USD rises to near 1.2540, driven by higher UK GDP
GBP/USD edged higher to near 1.2540 during Asian hours on Friday, buoyed by the release of higher-than-expected UK Gross Domestic Product (GDP) data for the first quarter.
Gold price attracts some buyers despite hawkish Fedspeak
Gold price edges higher for the second consecutive day on Friday. Weak employment data bolstered the speculation that the weakening economy would force the Fed to cut rates.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Rate cut optimism fuelled by higher US jobless claims
With Federal Reserve policy acting as the primary driver of investor sentiment in 2024, renewed optimism surrounding the possibility of rate cuts has propelled the Dow to its most significant rally since December.