USD/JPY defies resurgent USD demand, drops to session low

Haresh Menghani FXStreet

The USD/JPY pair snapped two consecutive days of winning streak and traded with bearish bias through Asian session on Wednesday.

The pair remained under some selling pressure as traders seemed to readjust their positions ahead of today's key event risk - the FOMC meeting minutes. Moreover, the pair defied broad based greenback recovery, with the key US Dollar Index reversing early losses and touching multi-week highs near 101.50 region, and touched a fresh session low level of 113.30 during early European session.

Even the prevalent risk-on mood, as depicted by positive trading sentiment surrounding equity markets, which tends to dent the Japanese Yen's safe-haven appeal, has failed to lend any support and hinder the pair's reversal from three-day high touched on Tuesday.

Investors on Wednesday keenly await the release of minutes from the Fed’s latest monetary policy meeting for fresh clues over the central bank's near-term monetary policy outlook. Today’s minutes would also assist investors gauge possibilities of a rate-hike action at the Fed’s upcoming meeting in March, which would eventually help in determining the pair’s next leg of directional move.

Technical levels to watch

A follow through retracement below 113.25 level is likely to accelerate the slide towards 113.00 handle ahead of 112.85 horizontal support below which the pair is likely to head towards testing 112.40 strong support area.

On the upside, 113.70-75 region now seems to have emerged as immediate resistance, which if cleared decisively is likely to boost the pair beyond 114.00 handle towards testing its next resistance near 114.25-30 region, en-route 50-day SMA strong hurdle near 114.90-115.00 psychological mark.

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 112.65

33% Bullish
33% Bearish
33% Sideways

Bias Neutral

1 Month

Avg Forecast 114.51

62% Bullish
8% Bearish
31% Sideways

Bias Bullish

1 Quarter

Avg Forecast 115.76

61% Bullish
0% Bearish
39% Sideways

Bias Bullish

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold holds above $5,000 as bears seem hesitant amid Fed rate cut bets

Gold edges lower at the start of a new week, though it defends the $5,000 psychological mark through the Asian session. The underlying bullish sentiment is seen acting as a headwind for the bullion. However, bets for more rate cuts by the Fed, bolstered by Friday's softer US CPI, keep the US Dollar bulls on the defensive and continue to support the non-yielding yellow metal as the focus now shifts to FOMC Minutes on Wednesday.

Week ahead: Data blitz, Fed Minutes and RBNZ decision in the spotlight

The US jobs report for January, which was delayed slightly, didn’t do the dovish Fed bets any favours, as expectations of a soft print did not materialize, confounding the raft of weak job indicators seen in the prior week.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.