Japanese Yen: Losses seem capped against US Dollar – UOB

FXStreet Insights Team FXStreet

United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann note that USD/JPY traded on a firm footing in early Asian trade as upward momentum continued to build. While the near-term bias remains tilted to the upside, they believe the pair lacks sufficient momentum to reach the major resistance at 158.70. Over the next 1–3 weeks, UOB continues to expect USD/JPY to trade within a 156.35–158.70 range.

Dollar-Yen firm but constrained

"24-HOUR VIEW: USD fluctuated between 157.41 and 158.29 on Monday and closed largely unchanged at 157.90 (+0.04%). Yesterday, we indicated that “the price action does not provide any clear directional clues.” We also indicated that USD “could trade between 157.55 and 158.45.” USD then traded within a range of 157.75/158.24. USD closed at 158.10 (+0.13%), but it traded on a firm note in the early Asian session today. Upward momentum is building, and the bias is on the upside. However, USD does not appear to have sufficient momentum to reach the major resistance at 158.70. To sustain the upside bias, USD must hold above 157.90, with minor support at 158.10. "

"1-3 WEEKS VIEW: We continue to hold the same view as Monday (05 Oct, spot at 157.65). As highlighted, rather than continuing to pull back within the previously expected 156.00/158.70 range, USD “is likely to trade in a range between 156.35 and 158.70.” "

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

Author

FXStreet Insights Team

FXStreet

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.

AUD/USD remains depressed 0.7000, awaits FOMC Minutes

AUD/USD struggles to capitalize on its recent recovery move and trades with a negative bias below 0.7000 in Wednesday's Asian session. Amid geopolitical uncertainty, the US Dollar attracts some dip-buyers after a fresh leg up in US bond yields, keeping the pair under pressure despite hawkish RBA expectations. All eyes now remain on the FOMC Minutes.

USD/JPY holds firm near 158.50 ahead of Fed Minutes

USD/JPY hangs close to a one-and-a-half-week high near 158.50 in the Asian session on Wednesday, with bulls now awaiting a move beyond the 200-day SMA hurdle before positioning for further gains ahead of the FOMC Minutes. Meanwhile, a fresh leg up in US bond yields revives US Dollar demand amid geopolitical uncertainties, boosting the pair amid dovish BoJ commentary.

Gold struggles below $4,150 as USD bulls look to FOMC Minutes for rate hike cues

Gold retains its intraday bearish bias through the early European session, eyeing a two-month low around the $4,100 neighborhood touched the previous day. The US Dollar catches fresh bids after Tuesday's corrective slide and is seen as a key factor weighing on the commodity as traders look to the FOMC meeting minutes for a fresh impetus.

Dogecoin extended correction and weakening momentum raise downside risks

Dogecoin extends its losses, trading around $0.090 down more than 5% so far this week. Bearish pressure is strengthening, with short positions reaching a one-month high and traders in overheated conditions. Meanwhile, weakening momentum indicators are also hinting at further losses in DOGE. Derivatives data shows cautious signals among traders.

Indian Rupee hits fresh four-month low, RBI hikes Repo Rate to 5.5%

The Indian Rupee weakens significantly against the US Dollar after a muted response, following the Reserve Bank of India’s monetary policy meeting on Wednesday. The USD/INR pair jumps to near 96.72, the highest level seen in four months. In the policy meeting, the RBI decide to hike its Repo Rate by 25 basis points to 5.5%, the first hike since February 2023.

Eurozone inflation just hit 3.8%, its highest in three years. This chart shows why the ECB can’t simply hike its way out

The ECB would normally have a relatively straightforward answer to inflation running almost twice its target: raise interest rates. But these are not normal circumstances. This time, the bond market is already doing part of the tightening for it, leaving the ECB facing an increasingly difficult dilemma.