- USD/JPY sits tightly after snapping a three-day losing streak the previous day.
- US dollar recovers losses as fears of the pandemic, US-China tussle intensifies ahead of the key earning results.
- The US defies Beijing’s claims on the South China Sea, President Trump says China deal intact.
- Japanese Industrial Production, US CPI will decorate the calendar.
USD/JPY seesaws around 107.30 at the start of Tuesday’s Asian session. In doing so, the yen pair takes rounds to Monday’s high following the recent recovery that defied the previous three days’ losses. With the coronavirus (COVID-19) and Sino-American headlines continue to offer background music to the markets, recent updates joined pre-earning cautious sentiment to justify the risk-off mood. However, the latest news concerning the vaccine and Hong Kong dollar peg could question the pair bulls.
Uncertainty compresses market moves…
Fears of wave 2.0 of the COVID-19 outbreak and the US-China tussle continue to weigh on the market’s risk-tone despite the early-week optimism. Despite the latest CNBC update suggesting an early vaccine production, coupled with Bloomberg’s risk-positive news concerning the Hong Kong dollar peg, trading sentiment remains downbeat. The reason could be traced from over 13.00 million of global pandemic cases and the US Secretary of State Mike Pompeo’s latest comments turning down Beijing’s claims on the South China Sea. Though, US President Donald Trump tried to cover-up the issue while citing the phase one deal status and China’s buying. Even so, traders are waiting for additional clues to justify the latest shift in the mood.
Global markets earlier cheered the hopes of further stimulus but failed to defy the rising pandemic and the risk-negative headlines concerning the already frail relations between the US and China. While portraying the same, Wall Street had to trim a heavy part of its initial gains to settle with mild gains whereas the US 10-year Treasury yields eased 1.5 basis points (bps) to 0.618% by the end of Monday’s session.
Recently, the CNBC relied on US health officials to suggest an early cure of the deadly virus while Bloomberg mentioned that the Trump administration members are dropping the previous idea of undermining the Hong Kong Dollar. While both the news is risk-positive, markets are waiting for clarifications to recall the risk-on mood.
Other than the risk catalysts, Japan’s May month Industrial Production, expected to match the preliminary readings of -25.9%, will precede the US Consumer Price Index (CPI), forecast +0.6% versus +0.1% prior, to offer fresh directions.
Technical analysis
A five-week-old descending trend line, currently around 107.35, restricts the USD/JPY pair’s immediate upside ahead of a 50-day SMA level of 107.45. Alternatively, 21-day SMA near 107.20 offers immediate support to the quote.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.