- USD/JPY has started out the Tokyo day soft after a tremendous rally form European prices onto the 112 handle.
- In the 4 hours chart, the pair continues moving away from its 100 and 200 SMA.
USD/JPY has been in the hands of the bulls overnight, but the bullishness has faded as we move through the Tokyo open with the price shying away from the overnight highs up at the 76.4% of July-Aug drop at 112.39. Currently, USD/JPY trades at 112.25, off the 112.38 high and up from the 112.25 session low. The Nikkei is trading at 23,746.50, consolidating the rally from 23,029 while trade wars remain the hot topic in the media, likely distracting the market from the matter at hand which is the divergence between the BoJ and FOMC with meetings in play tonight and next week respectively.
Dollar due a bullish correction?
Markets were risk-on markets despite the escalation of the trade dispute between the US and China. The pair was also supported by the 10-yr Tsy yields clearing the 3% mark as well as DJIA on the way to an all-time high following the big N225 breakout above the 4-month range top. However, we have the BoJ today seen on hold which underpins the upside CB divergence bid with the FOMC next week likely hiking rates. The Dollar is potentially due for a correction higher after its 2.5% decline over the last five weeks. Should the market figure that Trump will play hardball on China into the mid-terms, then this trade spat is not going to be resolved any time soon, that should be dollar bullish in the event of an exodus from EM-FX.
USD/JPY levels
Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, the pair continues moving away from its 100 and 200 SMA, with the shortest gaining upward traction, currently at around 111.45:
"In the mentioned chart, the Momentum indicator eases within positive territory, as a result of the pair being unable to surpass its previous high, but given that it remains near daily highs, and the RSI maintains gains around 65, the overall risk leans to the upside."
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 trades with negative bias, holds above 1.0700 as traders await US PCE Price Index
EUR/USD edges lower during the Asian session on Friday and moves away from a two-week high, around the 1.0740 area touched the previous day. Spot prices trade around the 1.0725-1.0720 region and remain at the mercy of the US Dollar price dynamics ahead of the crucial US data.
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 core inflation forecasts, disappointing the Japanese Yen buyers.
Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus
Gold price lacks any firm intraday direction and is influenced by a combination of diverging forces. The weaker US GDP print and a rise in US inflation benefit the metal amid subdued USD demand. Hawkish Fed expectations cap the upside as traders await the release of the US PCE Price Index.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US economy: Slower growth with stronger inflation
The US Dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.