- USD/JPY seesaws around the highest levels since early-April.
- Risk-on sentiment tightens the grip amid increasing hopes of economic recovery, receding riots in the US.
- Upbeat data, hopes of further monetary easing add to the pair’s strength.
- Risk catalysts will direct market performance amid a light calendar.
USD/JPY consolidates the previous day’s run-up to a multi-day high while declining to 108.90 at the start of Thursday’s Asian session. In doing so, the yen pair awaits fresh catalysts to extend the two-day run-up backed by risk-on sentiment.
Optimism all around...
Be it receding public unrest in the US or Trump administration’s readiness to provide funding to the coronavirus (COVID-19) vaccine programs, not to forget upbeat data and hopes of the economic restart, global markets are optimistic in recent days.
With US President Donald Trump’s step back from earlier threat to use harsh military power to tame the protests against the alleged police killing of Minnesota’s George Floyd, riots in the US seem to have receded off-late. In another market-positive effort, US President Trump extended government funding to five vaccine programs.
Elsewhere, the hopes of the economic recovery are gaining momentum with the key economies in Europe tightening their belts to wipe off the pandemic-led halt in activities. Further, expectations of another round of stimulus from the major central banks, starting from the ECB, as well as upbeat US data also helped the pair.
Against this backdrop, the US 10-year Treasury yields grew over six basis points (bps) to 0.75% whereas Wall Street stays firmly bid by the end of their Wednesday’s trading.
Investors may now keep eyes on the macro for immediate direction amid the lack of major data/events on the calendar during the Asian session. However, monetary policy meeting by the European Central Bank (ECB) and the US Jobless Claims remain as the key to watch afterward.
Technical analysis
Bulls are again preparing to confront the 109.30/40 resistance area comprising April high and multiple lows marked since the early-February. Though, a downside break below 200-day SMA level of 108.38 could recall 108.00 on the charts.
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 clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.