USD/JPY drops back closer to 1-1/2 month lows, eyeing 111.00 mark


   •  USD selling aggravates on German political news.
   •  Surging US bond yields fail to lend any support.
   •  US CPI/monthly retail sales eyed for fresh impetus.

After an initial uptick to 111.44 level, the USD/JPY pair ran through some fresh offers and has now drifted into negative territory for the fourth consecutive session.

The news that German party leaders have reached a breakthrough in coalition talks aggravated the US Dollar selling pressure and has been a sole factor behind the pair's sharp slide over the past hour or so.

Even a goodish pickup in the US Treasury bond yields also did little ease the strong bearish pressure surrounding the greenback and stall the pair's slide back closer to 1-1/2 month lows touched in the previous session. 

The pair has now moved dangerously close to breaking below the 111.00 handle, and the recent price action now seems to suggest that the near-term downward trajectory might still far from being over.

Traders, however, are likely to await the release of today's important US macro data - the latest inflation figures and monthly retail sales, which could now possibly limit any deeper losses, at least for the time being.

Technical outlook

As Omkar Godbole, Analyst and Editor at FXStreet write: “Disappointing US data would add credence to the bearish set up on the daily chart and open doors for a drop to 110.00 levels.”

He further adds: "Upbeat US CPI and retail sales number (data due today at 13:30 GMT) would - 
   •  Add credence to the 4-hour bullish price RSI divergence and pair's successful defense of 111.03 (50% Fib R of Sep-Nov rally).
   •  Could push 10-year US-Japan yield spread above 253 basis points.
   •  & hence the pair may have a re-look at 112.00-112.20 levels.”

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.

Feed news

GME stock positioned for another short squeeze

Get the full analysis and chart in our Insights. Upgrade to Premium today    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD: Dollar advances ahead of Fed

The greenback advanced on Friday to close the week with gains against most of its major rivals, with EUR/USD settling just above the 1.2100 level after trading as low as 1.2092. The focus is on the US Federal Reserve monetary policy meeting next Wednesday.

EUR/USD News

GBP/USD: Brexit tensions and reopening delays to hit the pound

The GBP/USD pair edged lower on Friday but held above the weekly low at 1.4072 and settled a few pips above the 1.4100 mark. British PM Johnson expressed “serious concern” about the spread of the Delta variant. GBP/USD at risk of falling further, mainly on a break below 1.4070.

GBP/USD News

Gold tests key trend line ahead of FOMC meeting

Gold spent the first half of the week trading in a relatively tight range as buyers could not hold the price above $1,900. Following a sharp decline to a six-day low of $1,869 on Thursday, the XAU/USD pair managed to stage a recovery and closed the day in the positive territory.

Gold News

Ethereum price prepares for a bullish weekend, targeting $3,000

Ethereum price seems prime to revisit $3,000. Although ETH faces resistance at $2,300, the upswing seems imminent. A downswing below $2,000 could invalidate the bullish thesis. 

Read more

Hot Inflation is warming the seat for the June FOMC

Americans are seeing the fastest price increases since their seventh-graders were born as inflation builds into the US economy from the disruptions of the pandemic lockdowns. Core CPI at 3.8% is the steepest gain in 29 years.

Read more

Forex MAJORS

Cryptocurrencies

Signatures