USD/JPY flirts with session lows, around 108.75 region

A softer risk tone benefitted the safe-haven JPY and prompted some selling around USD/JPY.
A subdued action around the US bond yields failed to assist the USD to register any recovery.
The fundamental backdrop suggests that the pair might remain confined in a range on Friday.

Haresh Menghani FXStreet

The USD/JPY pair traded with a mild negative bias on Friday and was seen hovering near daily lows, around the 108.75 region heading into the European session.

Having struggled to find acceptance above the 109.00 mark, the pair witnessed some selling on the last day of the week and eroded a part of the overnight gains to over two-week tops. A generally softer risk tone drove some haven flows towards the Japanese yen, which, in turn, was seen as a key factor exerting some pressure on the USD/JPY pair.

That said, concerns that the recent surge in COVID-19 cases could hinder Japan's fragile economic recovery acted as a headwind for the JPY. This, along with the BoJ's forecast that inflation will not reach the 2% target through early 2023, might help limit the downside for the USD/JPY pair amid a modest US dollar strength.

Meanwhile, a subdued action around the US fixed income market did little to lend any support to the USD. This comes amid the Fed's reassurance that it will keep interest rates low for a longer period might hold traders from placing any bullish bets around the USD, suggesting that the USD/JPY pair could remain confined in a range.

Market participants now look forward to Friday's US economic docket, featuring the release of March Personal Income/Spending data, Core PCE Price Index and revised Michigan Consumer Sentiment Index for April. This, along with the US bond yields, might influence the USD price dynamics. Apart from this, the broader market risk sentiment might further allow traders to grab some short-term opportunities.

Technical levels to watch

USD/JPY

Overview
Today last price	108.74
Today Daily Change	-0.19
Today Daily Change %	-0.17
Today daily open	108.93

Trends
Daily SMA20	108.95
Daily SMA50	108.49
Daily SMA100	106.29
Daily SMA200	105.76

Levels
Previous Daily High	109.22
Previous Daily Low	108.44
Previous Weekly High	108.84
Previous Weekly Low	107.48
Previous Monthly High	110.97
Previous Monthly Low	106.37
Daily Fibonacci 38.2%	108.92
Daily Fibonacci 61.8%	108.74
Daily Pivot Point S1	108.5
Daily Pivot Point S2	108.08
Daily Pivot Point S3	107.72
Daily Pivot Point R1	109.29
Daily Pivot Point R2	109.65
Daily Pivot Point R3	110.08

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 recedes to daily lows near 1.1850

EUR/USD keeps its bearish momentum well in place, slipping back to the area of 1.1850 to hit daily lows on Monday. The pair’s continuation of the leg lower comes amid decent gains in the US Dollar in a context of scarce volatility and thin trade conditions due to the inactivity in the US markets.

GBP/USD resumes the downtrend, back to the low-1.3600s

GBP/USD rapidly leaves behind Friday’s decent advance, refocusing on the downside and retreating to the 1.3630 region at the beginning of the week. In the meantime, the British Pound is expected to remain under the microscope ahead of the release of the key UK labour market report on Tuesday.

Gold looks inconclusive around $5,000

Gold partially fades Friday’s strong recovery, orbiting around the key $5,000 region per troy ounce in a context of humble gains in the Greenback on Monday. Additing to the vacillating mood, trade conditions remain thin amid the observance of the Presidents Day holiday in the US.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.