USD/JPY drops to fresh session lows, back closer to 108.00 handle

Bulls failed to capitalize on the overnight rebound and shrug off a modest USD uptick.
Rising US bond yields and hotter-than-expected US PPI did little to lend any support.
Technical selling below 200-hour SMA intensifies the intraday slide in the last hour.

Haresh Menghani FXStreet

The USD/JPY pair dropped to fresh session lows in the last hour, with bears now eyeing a move towards challenging the 108.00 round figure mark.

Having failed to capitalize on the overnight goodish bounce further beyond mid-108.00s, the pair came under some renewed selling pressure on the last trading day of the week and seemed rather unaffected by a fresh wave of US Dollar buying interest.

Against the backdrop of Thursday's hotter-than-expected US CPI report, the latest US Producer Price Index (PPI) also came in stronger than consensus estimates and further dampened expectations for an aggressive monetary easing by the Fed later this month.

The same was evident from a follow-through pickup in the US Treasury bond yields, which underpinned the greenback demand but failed to impress the bulls. Even a positive trading mood around equity markets failed to lend any support or stall the intraday slide.

The lack of any progress in the US-China trade negotiations - reaffirmed by not so optimism comments by the White House adviser Peter Navarro seemed to be the only factor underpinning the Japanese Yen's safe-haven demand and exerting pressure on the major.

Meanwhile, the latest leg of a sudden drop of around 20-pips over the past hour or so could further be attributed to some intraday technical selling below 200-hour SMA as traders look forward to comments by Chicago Fed President Charles Evans for a fresh impetus.

It would now be interesting to see if the pair is able to find any buying interest at lower levels or the current pullback marks the resumption of this week's rejection slide from the 109.00 handle, or six-week tops set on Wednesday - ahead of the Fed Chair Jerome Powell's dovish remarks.

Technical levels to watch

USD/JPY

Overview
Today last price	108.1
Today Daily Change	-0.39
Today Daily Change %	-0.36
Today daily open	108.49

Trends
Daily SMA20	108.06
Daily SMA50	108.86
Daily SMA100	110.11
Daily SMA200	110.8

Levels
Previous Daily High	108.54
Previous Daily Low	107.86
Previous Weekly High	108.64
Previous Weekly Low	107.53
Previous Monthly High	108.8
Previous Monthly Low	106.78
Daily Fibonacci 38.2%	108.28
Daily Fibonacci 61.8%	108.12
Daily Pivot Point S1	108.06
Daily Pivot Point S2	107.62
Daily Pivot Point S3	107.38
Daily Pivot Point R1	108.73
Daily Pivot Point R2	108.97
Daily Pivot Point R3	109.41

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 remains on the back foot below 1.1850

EUR/USD is back on the back foot on Wednesday, slipping below the 1.1850 area as the US Dollar picks up some modest traction. The move comes as traders position ahead of a busy run of US data and the release of the FOMC Minutes. Adding to the pullback are reports that the ECB’s Lagarde may step down before completing her term.

GBP/USD flirts with daily highs near 1.3580

GBP/USD manages to set aside two consecutive daily declines and trades with slight gains in the 1.3580 zone on Wednesday. Cable’s uptick comes despite acceptable gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold retains bullish bias amid Fed rate cut bets, ahead of Fed Minutes

Gold sticks to modest intraday gains through the early European session, reversing a major part of the previous day's heavy losses of more than 2%, to the $4,843-4,842 region or a nearly two-week low. That said, the fundamental backdrop warrants caution for bulls ahead of the FOMC Minutes, which will look for more cues about the US Federal Reserve's rate-cut path.

Pi Network rally defies market pressure ahead of its first anniversary

Pi Network is trading above $0.1900 at press time on Wednesday, extending the weekly gains by nearly 8% so far. The steady recovery is supported by a short-term pause in mainnet migration, which reduces pressure on the PI token supply for Centralized Exchanges. The technical outlook focuses on the $0.1919 resistance as bullish momentum increases.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Top 3 Price Prediction: Bitcoin, Ethereum, and Ripple face downside risk as bears regain control

Bitcoin, Ethereum, and Ripple remain under pressure on Wednesday, with the broader trend still sideways. BTC is edging below $68,000, nearing the lower consolidating boundary, while ETH and XRP also declined slightly, approaching their key supports.