USD/JPY Current price: 108.63
- Coronavirus-related fears fueled demand for safe-haven assets.
- US Treasury yields in free-fall, record lows for the 10-year note.
- USD/JPY about to challenge February monthly low at 108.31.
With 83,720 cases reported around the world and the death toll at 2,858, the coronavirus continues to be the one and only market motor. The USD/JPY pair collapsed, trading a few pips above the monthly low of 108.31. Wall Street is sharply lower ahead of the opening, with the DJIA down roughly 4,000 points so far this week. Meanwhile, the yield on the benchmark 10-year Treasury note reached a fresh all-time low of 1.16%. Fears of recession fuel the negative market’s mood.
Japanese data released this Friday was mixed. Tokyo January inflation rose by less-than-anticipated, up by 0.4% when compared to a year earlier. The core reading which excludes food and energy prices, resulted at 0.7%, below the expected and previous 0.9%. The January unemployment rate unexpectedly rose to 2.4% from 2.2%, while Housing Starts in the same month fell 10.1% YoY. Retail Trade was up by 0.6% monthly basis, while it fell by 0.4% on an annual base.
The US will publish today January Personal Income figures included core PCE inflation, Fed’s favourite inflation measure, foreseen at 1.7% from a previous 1.6%.
USD/JPY short-term technical outlook
The USD/JPY pair is oversold, but firmly bearish according to the 4-hour chart, as technical indicators keep heading south, despite being in extreme levels. In the mentioned time-frame, the pair is developing over 100 pips below all of its moving averages, with the 20 SMA already below the 100 SMA and about to cross the 200 SMA, all of which reflects the strength of sellers. The mentioned monthly low at 108.31 is the immediate support, with further declines expected once below it.
Support levels: 108.30 108.00 107.70
Resistance levels: 109.00 109.40 109.80
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
AUD/USD jumps above 0.6500 after hot Australian CPI data
AUD/USD extended gains and recaptured 0.6500 in Asian trading, following the release of hotter-than-expected Australian inflation data. The Australian CPI rose 1% in QoQ in Q1 against 0.8% forecast, providing extra legs to the Australian Dollar upside.
USD/JPY hangs near 34-year high at 154.88 as intervention risks loom
USD/JPY is sitting at a multi-decade high of 154.88 reached on Tuesday. Traders refrain from placing fresh bets on the pair as Japan's FX intervention risks loom. Broad US Dollar weakness also caps the upside in the major. US Durable Goods data are next on tap.
Gold price cautious despite weaker US Dollar and falling US yields
Gold retreats modestly after failing to sustain gains despite fall in US Treasury yields, weaker US Dollar. XAU/USD struggles to capitalize following release of weaker-than-expected S&P Global PMIs, fueling speculation about potential Fed rate cuts.
Ethereum ETF issuers not giving up fight, expert says as Grayscale files S3 prospectus
Ethereum exchange-traded funds theme gained steam after the landmark approval of multiple BTC ETFs in January. However, the campaign for approval of this investment alternative continues, with evidence of ongoing back and forth between prospective issuers and the US SEC.
US versus the Eurozone: Inflation divergence causes monetary desynchronization
Historically there is a very close correlation between changes in US Treasury yields and German Bund yields. This is relevant at the current juncture, considering that the recent hawkish twist in the tone of the Fed might continue to push US long-term interest rates higher and put upward pressure on bond yields in the Eurozone.