USD/JPY Forecast: Yields provide support

Valeria Bednarik FXStreet

USD/JPY Current price: 106.35

Japan will open its calendar this Wednesday, with the Corporate Service Price Index.
Wall Street is mixed, with the S&P reaching fresh record highs but the DJIA in the red.
USD/JPY is ending the day with gains above the 106.00 level.

The USD/JPY pair ends Tuesday with substantial gains in the 106.35 price zone, after peaking at 106.57. The pair holds on to intraday gains despite the poor performance of Wall Street, as while the S&P reached yet another record high, the DJIA closed in the red. US indexes were affected by a report indicating US consumer confidence plunged in August. Meanwhile, the pair found support in government debt yields, as Treasury yields were firmly higher, with that on the 10-year note reaching a one-week high of 0.72%.

Japan will open its macroeconomic calendar this Wednesday with the release of the July Corporate Service Price Index, previously at 0.8%. Also, the country will publish the final version of the June Leading Economic Index, expected unchanged at 85, and the Coincident Index for the same month.

USD/JPY short-term technical outlook

The USD/JPY pair settled above the 61.8% retracement of its latest daily decline, measured between 107.04 and 105.09, at 106.29, now the immediate support level. In the 4-hour chart, the pair is now holding above all of its moving averages, which anyway lack clear directional strength. Technical indicators have lost their bullish potential, the Momentum turning lower and the RSI consolidating around 68. The rally will likely continue on an extension beyond 106.70.

Support levels: 106.30 105.90 105.50

Resistance levels: 106.70 107.05 107.40

View Live Chart for the USD/JPY

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.