GBP/JPY drops to 1-week low on softer risk tone

Risk tone remains heavy as headlines concerning Iran/trade are on the rounds.
The odds favoring the need for easy monetary policy are getting stronger after the Fed Chair’s Testimony.

Anil Panchal FXStreet

Not only the US-China trade tension and rumors of the US air strikes in Syria but news that Iranian boats attempted the British tanker seize also strengthened the markets’ risk-off momentum. With this, GBP/JPY declines to the lowest since July 03 as it trades near 135.35 during early Thursday.

The US and China seem at loggerheads despite recent truce as media releases from both the nations keep raising doubts over the US President Donald Trump’s upbeat statements at the end of G20 that previously triggered broad risk-on.

Adding to the woes was the US Federal Reserve Chairman Jerome Powell’s Testimony that rubberstamped 25 basis points (bps) of a rate cut in their next meeting and cited a downside risk for inflation.

As if aforementioned catalysts weren’t enough to challenge risk-averse traders, rumors of the US readying airstrikes over some part of the Iranian targets in Syria, coupled with the CNN news indicating Iranian boats’ attempt to seize the British oil tanker, added further strength into the safe-havens like Japanese Yen (JPY). Macro risk barometer, the US 10-year treasury yield trims nearly 2 bps to 2.042% by the press time.

Given the lack of major data, investors can keep concentrating on the trade/political headlines to determine the near-term market direction.

Technical Analysis

With the 14-day relative strength index (RSI) trading near oversold territory, the price might attempt a recovery towards recent high surrounding 136.30 ahead of questioning the monthly top near 137.80, if not then late-September 2016 high around 132.50 and the year 2019 low at 131.79 can please the bears.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

EUR/USD holds losses near 1.1850 as US, China holidays keep trade muted

EUR/USD opens the week on a softer note, trading near 1.1860 during the Asian session on Monday. Activity is likely to remain muted, with United States markets closed for the Presidents’ Day holiday, while Mainland China is also shut for the week-long Lunar New Year break.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold remains below $5,050 despite Fed rate cut bets, uncertain geopolitical tensions

Gold edges lower after registering over 2% gains in the previous session, trading around $5,030 per troy ounce during the Asian hours on Monday. However, the non-interest-bearing Gold could further gain ground following softer January Consumer Price Index figures, which reinforced expectations that the Federal Reserve could cut rates later this year.

Week ahead: Data blitz, Fed Minutes and RBNZ decision in the spotlight

The US jobs report for January, which was delayed slightly, didn’t do the dovish Fed bets any favours, as expectations of a soft print did not materialize, confounding the raft of weak job indicators seen in the prior week.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.