USD/JPY between North Korea and the debt ceiling – Danske Bank

Pablo Piovano FXStreet

Allan von Mehren, Chief Analyst at Danske Bank, assessed the recent price action around the pair.

Key Quotes

“USD/JPY dropped below 108.20 driven by USD weakness on the back of EUR/USD buying related to the ECB meeting and as North Korean woes continues to weigh on risk sentiment and USD/JPY”.

“At the time of writing, the cross has stayed above our long USD/JPY position’s stop loss level at 108. However, further USD/JPY selling pressure ahead of North Korea’s foundation day tomorrow could push the cross below 108 today”.

“Previously, we have seen strong local demand below 108, but given the high uncertainty due to the US-North Korean tensions, the cross could fall substantially from here if the crisis escalates”.

“Meanwhile, the three-month suspension of the US debt ceiling has improved the prospect of a higher USD/JPY near term, However, North Korea will continue to dominate USD/JPY price actions”.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

GBP/USD flirts with tops near 1.3470

GBP/USD manages to regain composure and challenge the area of daily highs around 1.3470 on Friday. Cable picks up pace despite marginal gains in the Greenback in a context of swelling geopolitical tensions and rising global oil prices.

EUR/USD trims losses, back above 1.1500

EUR/USD picks up some pace and bouces off earlier lows, reclaiming the 1.1500 threshold and beyond at the end of the week. The pair’s modest pullback follows a persistent risk-averse market mood and renewed buying interest for the US Dollar.

Gold: The $4,000 mark holds the downside for now

Gold faces renewed selling pressure, falling sharply toweard the $4,000 mark per troy ounce as the US Dollar regains momentum. Escalating US-Iran tensions are keeping inflation concerns and expectations of further Fed rate hikes alive, weighing further on the yellow metal.

Bitcoin eyes 50-day EMA breakout, Ethereum consolidates, XRP steadies

Bitcoin, Ethereum, and Ripple trade near key technical levels on Friday as the broader cryptocurrency market pauses following last week's recovery. BTC is approaching the 50-day Exponential Moving Average while ETH continues to consolidate between two major EMAs.

Warsh needs to restore his reputation

We were glad to see our deeply negative reaction to the Warsh press conference was not some personal peculiarity. Just about everybody in the financial press felt the same way. The consensus is building it’s not the Fed in the dog-house but only Warsh. Today the WSJ changed it tune and blasted Warsh—"the honeymoon is already over..”

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.