USD/JPY Current price: 106.89
- Japanese data beat expectations but fall short of showing signs of improvement.
- Coronavirus crisis continues to dominate the financial world, equities leading the way.
- USD/JPY neutral-to-bullish in the short-term, critical resistance at 108.00.
The FX board is showing some stability this Tuesday, although investors remain on their toes amid the coronavirus crisis. Wall Street had another Black Monday, with the three major indexes shedding roughly 12% each, and government yields plummeting, despite aggressive measures taken by several central banks. The Bank of Japan is no exception, and purchased this Tuesday a record high of 120.4 billion yen of Japanese ETFs, after announcing at the beginning of the week, it would increase purchases up to 12 trillion yen per year.
Asian equities, however, advanced leading to some gains in US futures and a modest bounce in Treasury yields. The USD/JPY pair followed and advanced to 107.18. Things are not that good in Europe, with major indexes in the red, and Wall Street trimming pre-opening gains.
Japanese data beat expectations but remained far from impressive. Industrial Production in January rose 1.0% MoM, while it declined by 2.3% when compared to a year earlier. Capacity Utilization in the same month increased by 1.1%.
The American session will bring US Retail Sales, seen up in February 0.2%, while the Retail Sales Control Group is expected at 0.4% from 0.0% previously. The country will also release February Industrial Production and Capacity Utilization.
USD/JPY short-term technical outlook
The USD/JPY pair has retreated from the mentioned high, now hovering around the 50% retracement of its latest daily slump. The 4-hour chart shows that the pair continues to develop below a bearish 100 SMA and above a bullish 20 SMA, with the distance between both shrinking. One will have to give. Technical indicators hold within positive levels but lack directional strength. So far this week, the downside is being protected by buyers aligned around 105.35, the 38.2% retracement of the mentioned slump, while a critical resistance comes at 108.00, the 61.8% retracement.
Support levels: 106.50 106.10 105.70
Resistance levels: 107.10 107.60 108.00
View Live Chart for the USD/JPY
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 hovers around 1.0700 ahead of German IFO survey
EUR/USD is consolidating recovery gains at around 1.0700 in the European morning on Wednesday. The pair stays afloat amid strong Eurozone business activity data against cooling US manufacturing and services sectors. Germany's IFO survey is next in focus.
GBP/USD steadies near 1.2450, awaits mid-tier US data
GBP/USD is keeping its range at around 1.2450 in European trading on Wednesday. A broadly muted US Dollar combined with a risk-on market mood lend support to the pair, as traders await the mid-tier US Durable Goods data for further trading directives.
Gold: Defending $2,318 support is critical for XAU/USD
Gold price is nursing losses while holding above $2,300 early Wednesday, stalling its two-day decline, as traders look forward to the mid-tier US economic data for fresh cues on the US Federal Reserve interest rates outlook.
Crypto community reacts as BRICS considers launching stablecoin for international trade settlement
BRICS is intensifying efforts to reduce its reliance on the US dollar after plans for its stablecoin effort surfaced online on Tuesday.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.