- 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. 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 holds above 1.0650 after US data
EUR/USD retreats from session highs but manages to hold above 1.0650 in the early American session. Upbeat macroeconomic data releases from the US helps the US Dollar find a foothold and limits the pair's upside.
GBP/USD retreats toward 1.2450 on modest USD rebound
GBP/USD edges lower in the second half of the day and trades at around 1.2450. Better-than-expected Jobless Claims and Philadelphia Fed Manufacturing Index data from the US provides a support to the USD and forces the pair to stay on the back foot.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Ripple faces significant correction as former SEC litigator says lawsuit could make it to Supreme Court
Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.