USD/JPY: downward correction expected on a break below 112.60

Valeria Bednarik FXStreet

USD/JPY Current price: 112.75

Japanese August inflation hit 1.3% YoY, slowly giving signs of life.
US preliminary Markit PMI for September could indicate modest growth.

The USD/JPY pair continued rallying during the Asian session, to hit 112.86, its highest since July 19 amid persistent dollar's weakness, with USD selling resuming by the end of the US session. Japan's National CPI hit 1.3% YoY well above the 1.1% expected or the previous 0.9%, although the core reading excluding volatile food and energy prices, met market's expectations by printing 0.4%. The September preliminary Nikkei Manufacturing PMI showed that the pace of growth was below the expected one, with the index printing 52.9, above the previous 52.5, but below the forecasted 53.1. The All Industry Activity Index came in at 0.0% in July, below the 0.2% expected and with the previous month reading revised to -0.9%. The US will see today the release of the September preliminary Markit indexes, seen above final August readings.

Meanwhile, and despite the positive momentum in equities persist, and US Treasury yields hold to recent gains, the pair trades around 112.75. In the 4 hours chart, the price remains well above bullish 100 and 200 SMA, while technical indicators are losing directional strength well above their mid-lines, suggesting that selling interest remains limited. Above the mentioned daily high, the next resistance is 113.17 July´s high, while below 112.60, the pair could correct lower ahead of the weekend.

Support levels: 112.60 112.15 111.80

Resistance levels: 112.85 113.20 113.50

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.