• Lack of hawkish surprise from the FOMC minutes prompt some USD profit-taking.
• Risk-off mood underpins JPY’s safe-haven demand and adds to the pressure.
The USD/JPY pair continued losing ground for the third consecutive session on Thursday and touched 1-1/2 week lows in the last hour.
The pair struggled to build on overnight modest recovery, witnessed following the release of FOMC meeting minutes, and extended its corrective slide from four-month tops touched earlier this week. The prevalent risk-off mood was seen underpinning the Japanese Yen's safe-haven demand and was seen as one of the key factors exerting fresh downward pressure on the major.
The minutes showed that the Fed would tolerate inflation rising above its goal for some time and signalled no need to accelerate the rate hike pace to catch up with inflation. In absence of any hawkish surprise, the minutes gave the US Dollar bulls to take some breather, especially after the recent relentless rally and did little to extend any support.
Meanwhile, the market had a rather limited impact from the latest comments by the BoJ board member Sakurai, saying that progress in inflation has been slower than expected and the BoJ must continue current easing for some time.
Moving ahead, today's US economic docket, featuring the second tier releases of the usual initial weekly jobless claims and existing home sales data, might provide some impetus later during the early NA session.
Also in focus would be comments by influential FOMC members - New York Fed President William Dudley and Atlanta Fed President Raphael Bostic, which might influence the USD price-dynamics and produce some short-term trading opportunities.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes: “The USD/JPY pair looks set to test the psychological support of 109.00 and could go as low as 108.65 (May 4 low). A daily close below that level would confirm a bullish-to-bearish trend change.”
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 steady near 1.0650 amid risk reset
EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran.
Gold price defends gains below $2,400 as geopolitical risks linger
Gold price is trading below $2,400 in European trading on Friday, holding its retreat from a fresh five-day high of $2,418. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row, supported by lingering Middle East geopolitical risks.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.