USD/JPY: modest bounce on upbeat US data, still bearish

Valeria Bednarik FXStreet

USD/JPY Current price: 110.59

The USD/JPY pair fell down to 110.23 early European morning, as risk aversion continued dominating the financial world, prompting demand for the safe-haven currency. Backing the Asian currency was a positive surprise from Japanese GDP as the world's third largest economy expanded 2.2% in the first quarter, according to the preliminary estimate, confirming the economy is recovering at a nice pace. An intraday bounce was contained by selling interest around 110.80, with the pair holding below it, but bouncing modestly after the release of US positive data.

Advertisement
Forex VPS Optimized for MT4 and Any Broker

For the week ended May 12th, unemployment claims were of 232K, much better than the 240K expected and below previous unrevised 236K, while the Philadelphia Fed Manufacturing survey for March jumped to 38.8 from previous 22.0, also beating expectations of 19.5. The good news were not enough to fuel a strong recovery in the pair as risk aversion persists, and further declines in equities will likely result in the pair resuming its decline. In the 4 hours chart, the price remains well below its moving averages, with the 200 SMA around 111.20 capping the advance at the beginning of the day, and technical indicators barely bouncing within extreme oversold readings, all of which maintains the risk towards the downside. The 38.2% retracement of the November/December rally stands at 109.90, with a break below most likely fueling the bearish momentum.

Support levels: 110.25 109.90 109.50

Resistance levels: 110.80 111.20 111.60

View Live Chart for the USD/JPY

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.