Further USD gains against the JPY lie ahead over the medium-term - BBH

Sandeep Kanihama FXStreet Contributor

Analysts at Brown Brothers Harriman, notes that since November 4, the dollar has risen 11% against the yen, reaching almost JPY114 in Asia on Friday before profit-taking emerged.

Key Quotes

“The RSI has rolled over, and the Slow Stochastics is about to turn, while the MACDs are still trending higher. Dollar buying re-emerged ahead of JPY112.50 and support extends toward JPY112.30 A break could see another yen decline that pushes the greenback toward JPY111.60. The US rate premium continued to widen. The two-year advantage rose to 1.31%, which is the most since 2008. At 2.31%, the 10-year premium is at a five-year high.”

“In the bigger picture, it looks the drop in the dollar from last year's high (almost JPY126) to this year's low (circa JPY99) was corrective in nature, meeting a little more than the 50% retracement target of the Abenomics induced rally. This suggests further dollar gains against the yen lie ahead over the medium-term. Near-term, the JPY114.35-JPY114.65 may offer some resistance on the way to JPY115.00-JPY115.60.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD weakens as US jobs data trims Fed rate cut bets

The EUR/USD pair trades in negative territory for the third consecutive day near 1.1860 during the early European session on Thursday. Traders will keep an eye on the US weekly Initial Jobless Claims data. On Friday, the attention will shift to the US Consumer Price Index inflation report.

GBP/USD bullish outlook prevails above 1.3600, UK GDP data looms

The GBP/USD pair gains ground near 1.3635, snapping the two-day losing streak during the early European session on Thursday. The preliminary reading of UK Gross Domestic Product for the fourth quarter will be closely watched later on Thursday. The UK economy is estimated to grow 0.2% QoQ in Q4, versus 0.1% in Q1.

Gold remains on the defensive below two-week top; lacks bearish conviction amid mixed cues

Gold sticks to modest intraday losses through the Asian session on Thursday, though it lacks follow-through selling and remains close to a nearly two-week high, touched the previous day. The commodity currently trades above the $5,070 level, down just over 0.20% for the day, amid mixed cues.

UK GDP set to post weak growth as markets rise bets on March rate cut

Markets will be watching closely on Thursday, when the United Kingdom’s Office for National Statistics will release the advance estimate of Q4 Gross Domestic Product. If the data land in line with consensus, the UK economy would have continued to grow at an annualised pace of 1.2%, compared with 1.3% recorded the previous year.

The market trades the path not the past

The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

Sonic Labs’ vertical integration fuels recovery in S token

Sonic, previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility.