USD/JPY Forecast: Rising bets for a test of 108.00

The bearish note in USD/JPY stays well and sound so far this week.
US-China trade concerns, Honk Kong turmoil add to JPY-buying.
FOMC minutes will be the salient event later today.

Pablo Piovano FXStreet

The Japanese yen continues to appreciate vs. its American counterpart so far this week, dragging USD/JPY to its third consecutive session with losses. The pair has extended the correction lower after Monday’s rejection from levels just above 109.00 the figure, area coincident with the critical 200-day SMA.

Moving forward, US-China trade developments and the impact on the broader risk-appetite trends should remain crucial for the pair’s price action as well as for the performance of global yields. In addition, the deterioration in the political/social scenario in Honk Kong has fuelled the already effervescent negotiations between China and the US.

USD/JPY short-term technical outlook

USD/JPY short-term technical outlook

Technically speaking, USD/JPY faces the immediate significant resistance at the 200-day SMA just below 109.00. A breakout of this area should open the door for a potential visit to peaks in the mid-109.00s recorded earlier in the month ahead of the psychological handle at 110.00 the figure. On the other hand, if the selling impetus picks up pace, the 55-day SMA should provide interim contention ahead of November’s low near 117.90. Below this area, the upside pressure is expected to subside.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD makes a U-turn, focus on 1.1900

EUR/USD’s recovery picks up further pace, prompting the pair to retarget the key 1.1900 barrier amid further loss of momentum in the US Dollar on Wednesday. Moving forward, investors are expected to remain focused on upcoming labour market figures and the always relevant US CPI prints on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.