USD/JPY: Lower highs daily basis keep the risk towards the downside

Valeria Bednarik FXStreet

USD/JPY Current price: 111.06

View Live Chart for the USD/JPY

The USD/JPY pair managed to advance during the past Asian session, topping at 111.47 a lower high daily basis, before reversing its daily gains and trading a handful of pips above the 111.00 level ahead of Wall Street's opening, barely bouncing after mixed US Durable Goods data for February. Asian shares advanced, but European ones struggle around their opening levels, while yields remain pretty much unchanged daily basis, maintaining USD/JPY traders clueless. Exacerbating the absence of action is the upcoming US Congress decision, as speculative interest will likely wait for the vote of the Obamacare repeal bill, before compromising in a certain direction. The 1 hour chart presents a neutral-to-bearish stance, as the price remains well below bearish 100 and 200 SMAs, whilst the Momentum indicator has turned flat around its 100 level, and the RSI aims modestly higher around 43. In the 4 hours chart, technical indicators have bounced within bearish territory but remain below previous intraday highs, whilst the 100 SMA slowly turns south above the 200 SMA, both far above the current level. As long as the price remains below 111.60, the risk will be towards the downside, with renewed selling interest below 110.70 opening doors for a test of 109.90 a major long term Fibonacci support.

Support levels: 110.70 110.40 109.90

Resistance levels: 111.10 111.60 112.00

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: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

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: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

Week ahead: US NFP and CPI data to shake Fed cut bets, Japan election looms

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

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.