USD/JPY: catching an early bid in early Tokyo open, testing 21/10 hourly SMA cross

USD/JPY bulls take charge after volatile markets.
Dollar continues to recover after making fresh lows for the month.

Ross J Burland FXStreet

Overnight, USD/JPY dropped from 113.20 to 112.48 (to score a fresh a one-month low) before risk sentiment improved towards the close. The US benchmarks finished in the red again, S&P 500 -0.56%, DJIA -58% and NASDAQ - 0.60%. Currently, in the Tokyo open, USD/JPY is trading at 113.42, down -0.02% on the day, having posted a daily high at 113.49 and low at 113.37.

Forex today: euro took the limelight, two-way business in mixed risk sentiment

Volatility was on the rise again overnight but there was an air of caution in the markets supporting the safe havens such as the Yen. The fall in oil and other commodity prices (WTI down 2.1% to $55.60/bbl) may have contributed to that better-fixed income tone and a drag on Wall Street as a result. The greenback was weak in its own right while traders start to lose confidence in the Trump trade and await any sort of progress that might come from a full House voting in Washington tonight on tax reform.

The euro took full advantage of the environment, driven by positive results n the EZ economy this week with the firmer-than-expected German Q3 GDP data that lent early impetus to the euro. The DXY, weighed over 50% to the euro dropped to the lowest levels since late Oct. However, US yields then rallied back and the DXY recovered to more respectable levels at 93.88, as the recovery high, before leaning on 93.78/80 support area again.

USD/JPY levels

From a technical point of view, Valeria Bednarik, chief analyst at FXStreet explained that the risk remains towards the downside." In the 4 hours chart the price is below its 100 and 200 SMAs for the first time in over a month and a half, with the largest now acting as immediate resistance around 113.25. Indicators in the mentioned chart have bounced from oversold readings but lost upward strength within a bearish territory, supporting a bearish extension for the upcoming sessions," Valeria added.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold remains below $5,200 despite tariff jitters and geopolitical risks

Gold is seen consolidating in a range below the $5,200 mark during the Asian session on Friday amid mixed cues. Trade jitters, along with the risk of a potential US-Iran war, act as a tailwind for the safe-haven bullion. Meanwhile, the Fed's hawkish outlook keeps the US Dollar close to the monthly high and caps the non-yielding yellow metal. Nevertheless, the commodity remains on track to register gains for the fourth straight week, though the fundamental backdrop warrants some caution for bullish traders.