USD/JPY drops to fresh 24-week low as risk aversion holds the spotlight

FOMC-led USD declines persist with the week-start sluggish US data.
Despite likely end to the trade negotiation deadlock, the US-China talks aren’t expected to offer any breakthrough.
Iran continues to undermine the US authority despite the latest sanctions from the Trump Administration.

Anil Panchal FXStreet

Be it the latest downbeat print of the US activity data or the US-Iran tension, not to forget uncertainty surrounding the G20, risk aversion holds the spotlight.

As a result, safe-havens like Gold and the Japanese Yen (JPY) are on the buying spree, which in turn drags the USD/JPY pair to a fresh 24-week low of 106.78 before recovering to 106.93 heading into the European session on Tuesday.

The Dallas Fed Manufacturing Index was the latest disappointment to the US Dollar (USD) buyers as the activity gauge slumped to the mid-216 low on Monday. Adding to the greenback weakness could be the US President Donald Trump’s criticism of the Federal Reserve’s monetary policy.

Further, the US and Chinese Presidents are less likely to deliver any breakthrough during their trade talks at the G20 as respective media kept spicing the differences over their ideology.

On the other hand, Iran refrains from respecting the US authority and shuts down odds for any talks with the global leader after it levied fresh sanctions on the Arab country.

Additionally, Chinese policymakers were also on the wires favoring future monetary easing to confront global pessimism due to the US-led trade protectionism.

It should also be noted that the global risk gauge, the US 10-yaer treasury yeild, continues to inch closer towards breaking 2.0% mark by the press time.

Looking forward, speech from the US Federal Reserve Chairman Jerome Powell will be closely observed to get the clues of future monetary moves whereas second-tier data from the US and Japan could also grab the market attention.

Technical Analysis

Early month low around 107.80 acts as an immediate resistance to trigger the fresh leg up toward 21-day simple moving average (SMA) level near 108.30. Meanwhile, mid-April 2018 low near 106.60, followed by 105.70, might please bears during further declines.

1. R3 107.77
2. R2 107.65
3. R1 107.48
PP 107.36
1. S1 107.18
2. S2 107.07
3. S3 106.89

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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 clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

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

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

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.