USD/JPY battles with 23.6% Fibo, loses ground in near-term [Video]

Melina Deltas, CFTe XM

USDJPY has been in a battle with the 23.6% Fibonacci retracement level of the up leg from 102.60 to 111.65 at 109.50 over the last month, creating a tight sideways channel.

The 20- and 40-day simple moving averages (SMAs) as well as the Ichimoku cloud are acting as significant resistance regions. In terms of technical indicators, the RSI is declining in the negative area, while the stochastic is approaching the oversold zone, suggesting steeper decreases in the market.

If the negative pressures intensify, initial tough support could develop from the 109.10 barrier and the ten-week low of 108.70. Pushing under these levels, the 108.20 support, which is the 38.2% Fibonacci and stands near the tough 200-day SMA, may halt further loss.

If buying interest intensifies, resistance may originate from a trench of peaks from 110.45 to 110.80. Overcoming this boundary, the price may jump for the 16-month high of 111.65 before the 112.20-112.40 zone draw traders’ attention.

In brief, the very short-term bias is neutral near the SMAs and the Ichimoku cloud. A break either above 110.80 or below 108.70 could reveal the next clearer direction.

Author

Melina Deltas, CFTe

Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups.

EUR/USD stays below 1.1850 after dismal German sentiment data

EUR/USD stays in negative territory below 1.1850 in the second half of the day on Tuesday. Renewed US Dollar strength, combined with a softer risk tone keep the pair undermined alongside downbeat German ZEW sentiment readings for February.

GBP/USD falls toward 1.3550, pressured by weak UK jobs report

GBP/USD remains under bearish pressure and extends its decline below 1.3600 on Tuesday. The United Kingdom employment data suggested worsening labor market conditions, bolstering bets for a BoE interest rate cut next month and making it difficult for Pound Sterling to stay resilient against its peers.

Gold recovers modestly, stays deep in red below $4,950

Gold (XAU/USD) stages a rebound but remains deep in negative territory below $4,950 after touching its weakest level in over a week near $4,850 earlier in the day. Renewed US Dollar strength makes it difficult for XAU/USD to gather recovery momentum despite the risk-averse market atmosphere.

Canada CPI expected to show sticky inflation in January, still above BoC’s target

Economists see the headline CPI rising by 2.4% in a year to January, still above the BoC’s target and matching December’s increase. On a monthly basis, prices are expected to rise by 0.1%.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Stellar mixed sentiment caps recovery

Stellar price remains under pressure, trading at $0.170 on Tuesday after failing to close above the key resistance on Sunday. The derivatives metric supports the bearish sentiment, with XLM’s short bets rising among traders and funding rates turning negative.