USD/JPY continues to push lower below 110 despite USD strength

USD/JPY erases Monday's gains as 110 continues to act as a strong resistance.
US Dollar Index turns positive above 94.
Wall Street points to a positive opening.

Eren Sengezer FXStreet

After closing the fourth straight day higher, the USD/JPY pair failed to extend its gains on Tuesday and retraced yesterday's upside. As of writing, the pair is trading at 109.70, around 10 pips above its daily low, and is down 0.1% on the day.

The pair's fall on Tuesday is difficult to explain with the greenback gathering strength against its other rivals and the market sentiment staying relatively neutral. Ahead of the Markit and ISM service sector PMI data, the DXY is sticking to modest gains at 94.10, where it's up 0.1% on the day. On the other hand, Wall Street is pointing to a higher opening with both the S&P 500 and the Dow Jones Industrial Average staying in the green in the pre-market trading.

Looking at the technical picture, we see that the 200-DMA is sitting where the 110 psychological level is located, and this formation may have triggered profit-taking and weighed on the pair. On the other hand, despite a lack of clear flight-to-safety, the 10-year US T-bond yield is down nearly 1% on the day, helping the pair make a downward correction.

Technical levels to consider

With a decisive break below 109.60 (daily low), the pair could edge lower toward 109 (psychological level/50-DMA) and 108.10 (May 29 low). On the upside, only a daily close above 110 (psychological level/200-DMA) could bring in more buyers and open the door to 110.50 (May 15 high) and 111.35 (May 21 high).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

AUD/USD stuck as the RBA talks tough into a slowdown

The Australian Dollar is going nowhere in a hurry, and the contradiction at its core explains why. The Reserve Bank of Australia keeps dangling the prospect of another hike, yet the economy it governs just expanded 0.3% in the first quarter, a clear step down from the prior pace. A central bank threatening to tighten into a visible slowdown is not a recipe for conviction in either direction, and the tape shows it.

USD/JPY: Japanese Yen coiled at the line, leaning on everyone but Japan

The Yen is doing very little, and that stasis is the whole story. USD/JPY sits glued near 160.00 not because Japan has found new strength, but because two outside forces are fighting to a draw over it: a US rate complex that keeps the dollar bid, and a Ministry of Finance that refuses to let the line break.

Gold declines below $4,500 on stalled US-Iran ceasefire talks, US NFP data looms

Gold price edges lower to near $4,470 during the early Asian session on Friday. The precious metal remains volatile amid ongoing geopolitical turmoil. Traders will closely monitor the developments surrounding the US-Iran peace deal and the US May employment report later on Friday.

Bitcoin falls below $64K as demand turns negative, short-term holders' selling intensifies

Bitcoin has fallen below $64,000 on Thursday amid weakening market demand and mounting selling pressure from short-term holders. The leading cryptocurrency slipped toward the $63,000 level amid a broader risk-off environment, with several key metrics signaling one of the most challenging periods of the current market cycle.

Nonfarm payrolls: Testing the limits of Fed policy patience

The upcoming nonfarm payrolls report for May will provide the final update on the US labor market before Kevin Warsh attends his first policy meeting as the new Fed Chair later this month.

Recession on paper: What really moves the Canadian Loonie now?

Statistics Canada handed the headline writers a gift and the analysts a headache. Real GDP shrank 0.1% on an annualized basis in the first quarter, and with the fourth quarter of 2025 revised down to a 1.0% contraction, that is two negative quarters in a row, the textbook definition of a technical recession and Canada's first since the pandemic.