USD/JPY above 107 looking for a direction ahead of Fed speeches

Regional Fed Presiden Robert Kaplan, Neel Kashari and Raphael Bostic are set to speak in the US session on Monday.
The diplomatic tensions between the US and Russia weigh on the general market sentiment.

Flavio Tosti Independent Analyst

The USD/JPY is trading at around 107.21 down 0.13% on Monday as the diplomatic tensions between the US and Russia are still weighing on the US dollar. Additionally, the yen is a safe-haven in times of geopolitical uncertainties and the US-Russia diplomatic escalation might lead to a flight to safety and the appreciation of the Japanese Yen.

The US-led airstrike on Syria over the weekend was shrugged off by investors as US stock markets gapped to the upside Many analysts saw the attack as an isolated event. However, the focus now shifts to the diplomatic consequences between the US and Russia.

Further out in the US session, attention will also be on the three Fed speeches. Dallas Fed President R.Kaplan, a non-voter in the rate-setting FOMC and having a hawkish stance is scheduled to speak at 16:00 GMT. Delivering his speech at the same time of the day will be the rather dovish Minneapolis Fed President N.Kahkari who is also non-voter and finally the Atlanta Fed President R.Bostic, FOMC voter and centrist is slated to speak at 17:15 GMT.

Earlier, the US Retail Sales came in better-than-expected in March (month-on-month) at 0.6% versus -0.1% in January. The retail sales ex-autos came in line with analysts’ expectations at 0.2% m/m in March. The section of the retail sales called control group, included in the GDP, also came in line at 0.4% m/m as forecast by analysts. However, the Empire State Manufacturing Index fell to 15.8 in April from 22.5 the month earlier; analysts were forecasting 18.6 in April. The USD/JPY had a mild negative reaction to the recent news as it lost approximatively 20 pips from 107.41 prior to the data.

No Japanese macro data will be released on Monday, however, Tuesday will see mid-tier data on the Japanese Industrial Production and Capacity Utilization.

USD/JPY 4-hour chart

Supports lie at 107.12 and 106.61 swing lows while bulls should find resistance at 107.79 swing high, quickly followed by the 108 figure and finally 109 psychological level.

Author

Flavio Tosti

Independent Analyst

EUR/USD trims losses, back to 1.1830

EUR/USD manages to regain some composure, leaving behind part of the earlier losses and reclaim the 1.1830 region on Tuesday. In the meantime, the US Dollar’s upside impulse loses some momentum while investors remain cautious ahead of upcoming US data releases, including the FOMC Minutes.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Crypto Today: Bitcoin, Ethereum, XRP upside looks limited amid deteriorating retail demand

The cryptocurrency market extends weakness with major coins including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trading in sideways price action at the time of writing on Tuesday.

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.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.