• Renewed USD selling pressure fails to assist in building early up-move.
• Risk-off mood benefits JPY’s safe-haven appeal and capping further.
• Focus remains on Wednesday’s key FOMC decision and ‘dot plot’.
The USD/JPY pair trimmed some of its early gains and retreated around 20-pips from session tops, albeit has managed to hold just above the 106.00 handle.
The pair reversed an early dip to 105.68 level and touched an intraday high level of 106.31, supported by a goodish pickup in the US Treasury bond yields. The up-move, however, quickly ran out of steam and was being capped by some renewed US Dollar selling bias.
This coupled with heavy selling pressure in the US equity markets provided an additional boost to the Japanese Yen's safe-haven appeal and further collaborated to the pair's retracement from higher levels.
Despite a pull-back, the pair has managed to defend the 106.00 handle as traders now seemed reluctant to place aggressive bets and prefer to wait on the sidelines ahead of the next big event risk - the highly anticipated FOMC monetary policy decision, due to be announced on Wednesday.
In absence of any major market moving economic releases, the USD price dynamics and the broader market risk sentiment might continue to act as key determinants of the pair's momentum on the first trading day of the week.
Technical outlook
Valeria Bednarik, American Chief Analyst at FXStreet writes: “Technically, the bounce is little significant in terms of trend as in the longer view it retains a bearish stance. In the 4 hours chart and for the short term, the pair is neutral, developing below its 100 SMA, which offers an immediate resistance around 106.25, while technical indicators recovered some ground, but currently hold within neutral territory. Should the pair break above the mentioned MA with strength, there's scope for an approach to the 107.00 level, where selling interest will likely re-surge.”
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.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.