USDJPY Analysis: USD falls as demand for safe haven Yen rises

Dukascopy Bank Team Dukascopy Bank SA

"The risk-averse sentiment stemming from 'hard Brexit' (worries) is pushing down the dollar/yenю But so far, I think the correction from the dollar/yen's high in December, and concerns about stronger protectionism under the new US presidency, have been the dominant theme."

– Mizuho Securities (based on Reuters)

Pair's Outlook
For the sixth consecutive day yesterday the US Dollar weakened against the Japanese Yen, however, retaining its position above the 114.00 level. Even though the pair is supported by a tough demand cluster, represented by the 55-day SMA, the Bollinger band, the weekly and the monthly S1s, downside risks still persist. Moreover, technical studies also suggest the Greenback is to weaken, as they are now giving bearish signals. Risk-aversion is once again the main driver for the USD/JPY currency pair; in case of a hard shift to the risk-off sentiment, the 113.00 mark is expected to fail to hold the pair afloat today.
Traders' sentiment
Traders' sentiment reached a perfect equilibrium today, whereas the portion of purchase orders inched slightly down, namely from 73 to 69%.

Interested in USDjpy technicals? Check out the key levels

1. R3 114.90
2. R2 114.71
3. R1 114.49
PP 114.29
1. S1 114.08
2. S2 113.88
3. S3 113.67

Author

Dukascopy Bank Team

Dukascopy Bank SA

Dukascopy Bank stands as an innovative Swiss online banking institution, with its headquarters situated in Geneva, Switzerland.

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.