- USD/JPY is currently trying to stabilise and hold its form in the upper end of the 112 handle.
- The risk mood was solid overnight but the yen has hardly played out its safe haven role of late.
- Technical readings in the 4 hours chart, support further gains ahead.
USD/JPY is currently trying to stabilise and hold its form in the upper end of the 112 handle after losing some ground to profit taking and disappointing data in the US session overnight. The pair slipped from 112.80 to 112.66 at the open but is recovering back towards the eighties of the 112 handle again at the time of writing.
The risk mood was solid overnight but the yen has hardly played out its safe haven role of late and instead, the dollar gave out on a slightly less hawkish Powell and indeed a very disappointing set of housing starts. Later in the session, the Beige Book upheld the positive sentiment around the US economy and subsequently stopped the bear's in their tracks in the dollar within the day's range of between 94.9580-95.4070.
Market reactions
As for equities, the DJIA advanced by 79.40 points, or by 0.3%, to 25,199.29. This was the blue-chip gauge’s fifth positive session, ( its longest winning period since the eight-day period ended May 14th). Similarly, the S&P500 was up 0.2% by the close. The US 10yr treasury yields jumped from 2.85% to 2.88%, while 2yr yields, which made a 10-year high of 2.62% in Asia, were levelled around 2.61%. All in all, the dollar still has the advantage on a central bank divergence trade-off and the Fed fund futures yields continued to price 1 ½ more hikes in 2018.
USD/JPY levels
Valeria Bednarik, chief analyst at FXstreet explained that the technical readings in the 4 hours chart, support further gains ahead:
The pair is developing well above its 100 and 200 SMA, which extended their upward slopes, while technical indicators stabilized well into positive territory, the RSI after correcting overbought conditions. Dollar's latest decline seems corrective and the pair still has room to extend its advance beyond the 113.00 figure, although a stepper downward move could come on a break below the 112.50/60 region, the immediate support area."
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 retreats to 1.0750, eyes on Fedspeak
EUR/USD stays under modest bearish pressure and trades slightly near 1.0750 on Wednesday. Hawkish comments from Fed officials help the US Dollar stay resilient and don't allow the pair to stage a rebound.
GBP/USD struggles to hold above 1.2500 ahead of Thursday's BoE event
GBP/USD stays on the back foot and trades in negative territory below 1.2500 after losing nearly 0.5% on Tuesday. The renewed US Dollar strength on hawkish Fed comments weighs on the pair as market focus shifts to the BoE's policy announcements on Thursday.
Gold fluctuates in narrow range below $2,320
After retreating to the $2,310 area early Wednesday, Gold regained its traction and rose toward $2,320. Hawkish tone of Fed policymakers help the US Treasury bond yields edge higher and make it difficult for XAU/USD to gather bullish momentum.
SEC vs. Ripple lawsuit sees redacted filing go public, XRP dips to $0.51
Ripple (XRP) dipped to $0.51 low on Wednesday, erasing its gains from earlier this week. The Securities and Exchange Commission (SEC) filing is now public, in its redacted version.
Softer growth, cooler inflation and rate cuts remain on the horizon
Economic growth in the US appears to be in solid shape. Although real GDP growth came in well below consensus expectations, the headline miss was mostly the result of larger-than-anticipated drags from trade and inventories.