USD/JPY: Bias to lean against strength – OCBC

FXStreet Insights Team FXStreet

USD/JPY consolidated this morning, after 4 sessions of back-to-back decline. Pair was last at 147.10 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

2-way trades likely

"Daily momentum shows signs of turning mild bearish but decline in RSI moderated. 2-way trades likely, given political risks heading into the weekend, but maintained bias to lean against strength. Resistance at 147.80 (21, 50 DMAs), 148.30 levels (200 DMA, 23.6% fibo retracement of Apr low to Jul high). Support at 146.50/70 levels (100 DMA, 38.2% fibo) and 145.40 (50% fibo)."

"LDP party will vote to select its leader on Saturday. We expect JPY weakness to reverse when political uncertainty fades and that BoJ to proceed with policy normalization. Wage growth, broadening services inflation and upbeat economic activities in Japan should continue to support BoJ policy normalization. The next meeting is on 30 October and another one in December."

"Markets are coming close to pricing in a hike at December meeting. We believe an earlier than expected hike in Oct meeting is plausible. Fed-BoJ policy divergence should underpin USD/JPY's broader direction of movement to the downside. Near term, concerns of duration of US government shutdown provides another tailwind for JPY strength amid proxy demand for safe haven plays."

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.

EUR/USD holds losses near 1.1850 as US, China holidays keep trade muted

EUR/USD opens the week on a softer note, trading near 1.1860 during the Asian session on Monday. Activity is likely to remain muted, with United States markets closed for the Presidents’ Day holiday, while Mainland China is also shut for the week-long Lunar New Year break.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold remains below $5,050 despite Fed rate cut bets, uncertain geopolitical tensions

Gold edges lower after registering over 2% gains in the previous session, trading around $5,030 per troy ounce during the Asian hours on Monday. However, the non-interest-bearing Gold could further gain ground following softer January Consumer Price Index figures, which reinforced expectations that the Federal Reserve could cut rates later this year.

Top Crypto Losers: Dogecoin, Zcash, Bonk – Meme and Privacy coins under pressure

Meme coins such as Dogecoin and Bonk, alongside the privacy coin Zcash (ZEC), are leading the broader market losses over the last 24 hours. DOGE, ZEC, and BONK ended their three consecutive days of recovery with a sudden decline on Sunday, as crucial resistance levels capped the gains. Technically, the altcoins show downside risk, starting the week under pressure.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.