USD/JPY: Bulls in control with eye on the 107 handle


  • USD/JPY holds on the 106 handle as a return of risk props up the pair.
  • Technical indicators in the mentioned time-frame remain within positive levels.

USD/JPY holds in the newly acquired 106 territories, boosted again overnight in a risk-on environment where US stocks moved sharply higher. Trump announced that restrictions on Huawei operations would be delayed 90 days, giving US telecom companies more time to untangle their systems from reliance on the company’s technology. This, however, followed weekend comments from Trump over twitter warning that it would be difficult to reach a trade deal if China “did something violent” in Hong Kong.

The Dow Jones Industrial Average DJIA, +0.96% rose around 250 points, or 1%, to end near 26,136, according to preliminary figures, while the S&P 500 SPX added 35 points, or 1.2%, to close near 2,924. The Nasdaq Composite put on around 107 points to end the day near 8,003, a gain of 1.4%.  The US dollar was broadly stronger, supported by higher yields. The Washington Post reported that the White House was considering cutting the payroll tax to stimulate growth. USD/JPY rose from 106.30 to 106.70. 

Fed president Rosengren advocating for the Fed to pause 

Boston Fed president Rosengren who dissented against the rate cut in July, advocating for the Fed to pause at this stage, bullish on the US economy and showing little concern for overseas doom and gloom. In turn, US 2-year Treasury yields climbed from 1.50% to 1.55% while the 10-year yield rose from 1.58% to 1.61%. Still, markets expect a rate cut as soon as September - " Markets are pricing 29bp of easing at the 19 September Fed meeting, and a terminal rate of 0.97% (Fed funds rate currently 2.13%)," analysts at Westpac explained. 

USD/JPY levels

Valeria Bednarik, the Chief analyst at FXStreet explained that the USD/JPY pair hast spent the last American session consolidating gains in the 106.50/60 region, maintaining a neutral stance in the short term:

"In the 4 hours chart, the 20 SMA has turned flat below the current level, while the 100 SMA maintains its bearish slope, approaching the mentioned Fibonacci resistance. Technical indicators in the mentioned time-frame remain within positive levels, lacking directional strength and off their daily highs."

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD hovers around the 34-months lows amid growth concerns

EUR/USD is trading below 1.0850, just above the lowest since April 2017. Concerns about eurozone growth are weighing on the common currency. Markets are watching coronavirus developments. 

EUR/USD News

GBP/USD shrugs off Brexit concerns and holds its ground

GBP/USD is trading around 1.3050, little-changed. The French foreign minister warned of acrimonious Brexit talks as the UK's chief negotiator is laying down a tough stance. 

GBP/USD News

Forex Today: Coronavirus fears persist, Japanese economy squeezes, cryptos climb down

China has announced it will stimulate the economy in the face of the coronavirus outbreak, including lower corporate taxes and increased spending. While most factories have returned to work, Beijing has tightened restrictions on movements in the Hubei province.

Read more

Gold slips below $1580 level amid improving risk sentiment

Gold retreats from two-week tops amid receding demand for traditional safe-haven assets. The precious metal failed to capitalize on its recent positive move to near two-week tops and edged lower during the early European session on Monday amid fading safe-haven demand.

Gold News

FXStreet launches Real-Time Trading Signals

FXStreet Signals offers access to explanatory live webinars, real-time notifications when signals are triggered and exclusive membership to the company’s Telegram group, where users get direct guidance by our analysts and get room to discuss and interact.

More info

Forex MAJORS

Cryptocurrencies

Signatures