USD/JPY bulls looking to test corporate offers and key Fibo resistance


  • USD/JPY is pressuring a key technical resistance, testing highest levels since early March business.
  • USD/JPY is currently trading at 111.99 between a range of 112.04 and 111.84.
  • Eyes on trade hopes, stocks and USD/JPY is propped up by wider UST-JGB spreads over parts of the curve.

Global markets are risk positive this week which has lowered demand for the safe-haven yen. EUR/JPY was a major driver on Friday which saw its best daily rise since February 1 and Japanese importers and investors are said to the better buyers on dips in USD/JPY which has seen the pair cross the 112 thresholds, albeit capped by offers from Japanese exporters.

UST-JGB spreads

  • 5yr UST-JGB spread 30/60-day log correlations with USD/JPY are +0.61/+0.58.
  • 10yr UST-JGB spread 30/60-day log correlations with USD/JPY are +0.63/+0.61.
  • 30yr UST-JGB spread 30/60-day log correlations with USD/JPY are +0.53/+0.55.

On the trade front, things are looking up with positive noises out of US-China trade talk negotiations from the weekend. China is considering to reshuffling some of its tariffs off agricultural goods and China is looking to lift a trade ban on poultry and may buy more pork to meet a growing supply deficit. US Treasury Secretary Steven Mnuchin also said that the US is open to agreeing on repercussions for not keeping up its end of any trade agreement, expecting the same from China.  

USD/JPY levels

On a technical basis, USD/JPY has held over cloud support at 111.01 and looks set on the 112.13 March high through the key 112.08 Fibonacci level, a 76.4 percent retracement of the October 2018-January 2019 drop from 114.55 to 104.10. A break there opens 112.43 and the 112.80 2015- 2019 downtrend and December 2018 highs.

"Failure at cloud support is needed to alleviate immediate upside pressure and will re-target the 109.70 recent low. The 109.70 low guards the 38.2% retracement at 109.06 and there is scope for the 50% retracement at 108.11. The base of the cloud lies at 108.11,"

analysts at Commerzbank argued.
 

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD: Double bottom breakout fails ahead of the Fed

The bullish case for EUR/USD has weakened ahead of the FOMC (Federal Open Market Committee) rate decision due this Wednesday. The currency pair closed well below 1.1263 on Friday, invalidating the double bottom breakout confirmed on June 6.

EUR/USD News

GBP/USD consolidates the downside near 1.2600, UK politics in spotlight

Although looming Brexit uncertainty dents investment by firms, the GBP/USD pair manages to take advantage of the recent US Dollar (USD) pullback heading into the London open on Monday.

GBP/USD News

USD/JPY wavers in range near 108.60 amid risk-on

USD/JPY failed to sustain at higher levels once again and returned to the familiar range around 108.60 amid mixed Asian stocks while higher US equity futures and Treasury yields help keep the minor bids intact ahead of Fed.  

USD/JPY News

Gold: 100-month MA is a level to beat for the bulls

Gold (XAU/USD) is struggling to cut through key technical line which proved a tough nut to crack in 2018. The yellow metal rose to $1,358 on Friday, but the break above the 100-month MA.

Gold News

Trade War With India Starts: How Trump is Winning the Global War in 10 Tweets

After a year of talks on U.S. barriers to Indian steel and aluminum, India retaliates against Trump. The Hindu reports India to Impose Retaliatory Tariffs on 29 U.S. Goods Starting June 16. 

Read more

Majors

Cryptocurrencies

Signatures