|

Japanese Yen: Bearish against US Dollar but momentum slows – UOB

UOB’s Quek Ser Leang and Lee Sue Ann note USD/JPY pulled back sharply after closing at 159.19, with scope to test 158.70 while a sustained drop below that level and 158.40 strong support is seen as unlikely. They maintain a positive medium-term view, noting that a rise above 159.45 is possible, though any further advance is unlikely to threaten the 2024 high at 162.00.

Dollar-Yen holds gains as support watched

"24-HOUR VIEW: Last Thursday, USD rose to 159.34 and then pulled back to close largely unchanged at 158.96 (+0.03%). When USD was at 159.05 on Friday, we indicated that “the brief advance did not result in any increase in upward momentum,” and we expected USD to “trade between 158.80 and 159.25.” We were not wrong, even though USD traded within a narrower range than expected (158.87/159.23). USD closed at 159.19 (+0.14%) but it dropped sharply today. Despite the decline, downward momentum has not increased much. That said, there is a chance for USD to test 158.70. A continued decline below this level is unlikely, and the strong support at 158.40 is unlikely to come under threat. Resistance levels are at 159.05 and 159.25."

"1-3 WEEKS VIEW: We have held a positive USD view since the middle of the month. In our most recent narrative from last Thursday (21 May, spot at 158.85), we highlighted that “upward momentum continues to slow, and a breach of 158.40 (‘strong support’ level) would shift the outlook for USD from positive to neutral.” We continue to hold the same view for now."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

More from FXStreet Insights Team
Share:

Editor's Picks

GBP/USD languishes near weekly low, below 1.3600 as USD bulls await Warsh's speech

The GBP/USD pair is seen consolidating near the lower end of its weekly range, below the 1.3600 mark, during the Asian session. The downside, however, remains cushioned as traders look for more cues about the US Federal Reserve's interest rate path before placing fresh directional bets.

EUR/USD holds gains above 1.1650 on hawkish ECB bias

The EUR/USD pair edges higher to around 1.1655 during the early Asian session. A hawkish stance of the European Central Bank provides some support to the Euro against the US Dollar. Traders will closely monitor the Jackson Hole Symposium event later on Friday for fresh impetus.

Gold keeps sight of $4,700 ahead of Fed Warsh’s speech
Gold is making another run to retest 15-week highs of $4,697 early Thursday. Gold traders are taking advantage of an upbeat mood-led US Dollar (USD) retreat, looking past hot US core Personal Consumption Expenditures (PCE) Price Index data for July. Renewed USD weakness offers the much-needed boost to Gold, following Wednesday’s pullback from near the $4,675 neighbourhood.
Bitcoin holds at $78,000 amid US PCE surprise – SPX6900, VeChain rally

The broader cryptocurrency market maintains a constructive tone, with Bitcoin (BTC) sustaining gains above $78,000 on Thursday. The US July Personal Consumption Expenditures (PCE) Price Index inflation came in higher than expected on Wednesday, suggesting that inflation remains elevated. SPX6900 (SPX) and VeChain (VET) recorded double-digit gains over the last 24 hours, emerging as top performers.

South Korean Won gains on back-to-back BoK interest rate hikes

The South Korean Won trades higher against the US Dollar on Thursday, with USD/KRW falling 0.3% to near 1,380 during the Asian trading session. The pair revisits its 11-month low as back-to-back interest rate hikes by the Bank of Korea have strengthened the currency.

Kevin Warsh’s Jackson Hole dilemma: Say too much, too little, or just enough

Kevin Warsh is preparing to deliver his first Jackson Hole speech as Federal Reserve (Fed) Chair on Friday, and expectations extend well beyond whether interest rates will be raised or left unchanged in September.