USD/JPY bounces off fresh lows near 108.70

The pair drops to fresh 8-month lows near 108.70.
Lower US yields, risk-off trade sustain the downside.
Trade, US shutdown, key data to rule sentiment this week.

Pablo Piovano FXStreet

The renewed buying bias around the Japanese currency is now dragging USD/JPY to fresh multi-month lows in the vicinity of 108.70, levels last seen in May 2018.

USD/JPY looks to risk trends, yields

The pair is down for the fifth consecutive session so far on Wednesday, navigating multi-month lows in the area below the critical support at 109.00 the figure, always against the backdrop of prevailing risk-off sentiment and declining US yields.

In fact, yields of the key US 10-year benchmark are extending their leg lower and are now testing the 2.66% neighbourhood, or fresh 8-month lows.

In the very near term, the risk-off trend could extend further as long as the US government shutdown remains unsolved, rendering in extra support for the pair. In this regard, tomorrow could be a key date as the US Congress is expected to resume its activity tomorrow.

What to look for around USD/JPY?

Ruling out any meaningful changes in the BoJ’s monetary policy stance in the next months, the focus of attention should remain on the Fed’s rate path and its renewed data-dependent stance, while the persistent decline in US yields should keep the pair under pressure for the time being.

USD/JPY levels to consider

As of writing the pair is losing 0.73% at 108.91 and a break below 108.71 (low Jan.1) would aim for 108.11 (monthly low May 29 2018) and then 107.78 (high Apr.13 2018). On the upside, the initial hurdle aligns at 110.40 (10-day SMA) followed by 111.09 (200-day SMA) and finally 111.72 (high Dec.26 2018).

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.

EUR/USD onsolidates around mid-1.1800s as traders keenly await FOMC Minutes

The EUR/USD pair struggles to capitalize on the previous day's goodish rebound from the 1.1800 neighborhood, or a one-and-a-half-week low, and consolidates in a narrow band during the Asian session on Wednesday. Spot prices currently trade just below mid-1.1800s, nearly unchanged for the day.

GBP/USD seems vulnerable near mid-1.3500s; UK CPI/FOMC Minutes awaited

The GBP/USD pair struggles to capitalize on the previous day's late rebound from an over one-week low – levels below the 1.3500 psychological mark – and trades with a negative bias for the third consecutive day on Wednesday. The downside, however, remains cushioned as investors seem reluctant to place aggressive directional bets ahead of the release of the latest UK consumer inflation figures and FOMC Minutes.

Gold regains positive traction after Tuesday's over 2% slump as traders await FOMC Minutes

Gold gains some positive traction during the Asian session on Wednesday and recovers a part of the previous day's heavy losses more than 2%, to the $4,843-4,842 region or a nearly two-week low. The intraday move higher could be attributed to repositioning trade ahead of the release of the FOMC Minutes.

Top Crypto Gainers: Jito drops, Morpho holds steady, Convex Finance climbs

Decentralized Finance tokens, including Jito, Morpho, and Convex Finance, rank among the top-performing crypto assets over the last 24 hours. Jito dips on Wednesday after rallying 22% the previous day on the launch of a new mainnet node.

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.