USD/JPY: Expected to trade with an upward bias – UOB Group

FXStreet Insights Team FXStreet

Scope for US Dollar (USD) to test 158.50; a breach above this level is not ruled out, but any further advance is highly unlikely to reach 159.00. In the longer run, USD is expected to trade with an upward bias against the Japanese Yen (JPY); any advance is expected to face significant resistance at 159.00, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Any advance is expected to face significant resistance at 159.00

24-HOUR VIEW: “When USD was trading at 158.15 yesterday, we indicated that it ‘could rise, but it does not appear to have enough momentum to reach 159.00 (there is another resistance level at 158.50).’ USD subsequently rose less than expected, reaching a high of 158.42. It then closed at 158.02, higher by 0.27%. While there has been no significant increase in upward momentum, there is scope for USD to test 158.50. A break of this level this not ruled, but any further advance is highly unlikely to reach the major resistance at 159.00. On the downside, a breach of 157.30 (minor support is at 157.70) would mean that USD is more likely to trade in a range instead of testing 158.50.”

1-3 WEEKS VIEW: “There is not much to add to our update from yesterday (07 Jan, spot at 158.15). As highlighted, ‘upward momentum is building, and we expect USD to trade with an upward bias.’ We also highlighted that, ‘any advance is expected to face significant resistance at 159.00.’ We continue to hold the same view provided that 156.80 (no change in ‘strong support level) is not breached.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD languishes near two-month low amid renewed Iran tensions

AUD/USD holds above 0.7000 during the Asian session on Wednesday, though it remains close to a nearly two-month low set the previous day. Fresh US strikes on Iran temper hopes for a peace deal and benefit the safe-haven US Dollar. Furthermore, inflationary concerns continue to fuel hawkish Fed expectations, lending additional support to the buck ahead of the US CPI report. Adding to this, reduced bets on an RBA rate hike in June cap the currency pair.

USD/JPY sits near 160.50 intervention zone as bulls shrug off Japan's strong PPI

USD/JPY consolidates just below mid-160.00s, or its highest level since late April, as economic concerns stemming from the Middle East conflict continue to undermine the Japanese Yen (JPY). Furthermore, a fresh wave of US strikes on Iran benefits the safe-haven US Dollar and acts as a tailwind for the currency pair, countering Japan's hotter-than-expected PPI report. However, intervention fears cap the upside as traders seem hesitant ahead of the US consumer inflation figures later this Wednesday.

Gold flirts with $4,200, lowest since March 23 on hawkish Fed bets

Gold drops to a fresh low since March 23, around the $4,200 mark during the Asian session on Wednesday, as fresh US strikes on Iran fuel inflationary concerns and bolster bets for more hawkish central banks, including the US Fed. Meanwhile, US Dollar bulls are turning cautious ahead of the US CPI report, which could limit bullion losses. However, the recent breakdown below the 200-day SMA suggests that the path of least resistance for the XAU/USD is to the downside.

Bitcoin sell-off pushes over 50% of circulating supply into loss, hinting at market bottom

Bitcoin dropped near $61,000 on Tuesday, with the latest sell-off pushing long-term market indicators toward levels historically associated with bear-market bottoms, according to a report by K33 Research.

When the chips are down, the AI tape starts to shake

The market came into Tuesday trying to sell investors the comforting ”Turnaround Tuesday” idea that Friday’s AI fracture was just another pothole on the road higher. By the close, that story had lost its bid. Monday’s dead cat bounce had done what dead cat bounces always do.

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.