USD/JPY holding in bullish territories in the face of overcooked USD


  • USD/JPY consolidating in what could be considered as overbought US dollar territory.
  • Eyes on US Treasures, congress, currency wars and the cases of COVID-19. 

USD/JPY is topping out in the 111 handle as the dollar loses steam and the pair falls into consolidation between 110.08 and 111.62. The US dollar has slowed in its advance following a series of intervention from the central banks seeking to free-up the USD liquidity and as the Federal Reserve moves to purchase unlimited quantities of Treasury bonds as well as mortgage-backed securities, direct purchases of corporate bonds, and direct loans to companies, loans which Congress now need to approve.  

Watching currency wars

Apart from all of this, markets are now weighing the possibility fo currency wars following President Donald Trump's comments that the strength of the dollar makes trade difficult. The question is whether the strength of the USD will trigger a round of concerted intervention. Indeed,  the BoJ will be keeping a close eye on the market and to continue to provide liquidity through various open market operations and asset buying. 

As for the yen, a switch in the FX playbook could see a flight to the yen considering COVID-19's spread and negative fallouts for the global economy. However, as analysts, a Rabobank pointed out, even if the number of coronavirus cases and related mortality rates peaks in Europe and the US over the next few weeks, "this is likely to see panic reducing and USD strength ebbing." "If the crisis is prolonged and the value of the USD continues to soar, however, concerted FX intervention to soften the dollar could be again on the menu."

We next await the Treasury market's reaction to the progress on the fiscal front as Congress continues to debate a $1.5-2tn "phase 3" rescue package. Democrats blocked the bill through the Senate arguing it focuses on the corporate sector and does little to help everyday people. While there has been no resolution to the stalemate situation, but it is expected to be resolved shortly which, combined with the latest move by the Fed to unlimited QE, should continue which on yields that have been heading lower this week (albeit, covering 6% today). 

USD/JPY levels

USD/JPY

Overview
Today last price 111.39
Today Daily Change 0.16
Today Daily Change % 0.14
Today daily open 111.23
 
Trends
Daily SMA20 107.63
Daily SMA50 108.96
Daily SMA100 108.99
Daily SMA200 108.29
 
Levels
Previous Daily High 111.6
Previous Daily Low 109.67
Previous Weekly High 111.51
Previous Weekly Low 105.15
Previous Monthly High 112.23
Previous Monthly Low 107.51
Daily Fibonacci 38.2% 110.86
Daily Fibonacci 61.8% 110.4
Daily Pivot Point S1 110.07
Daily Pivot Point S2 108.91
Daily Pivot Point S3 108.14
Daily Pivot Point R1 112
Daily Pivot Point R2 112.76
Daily Pivot Point R3 113.92

 

 

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD extends sideways grind around 1.1650 after mixed US data

EUR/USD is struggling to find direction on Thursday and continues to fluctuate in a relatively tight range around mid-1.1600s. Mixed data releases from the US don't seem to be having a noticeable impact on the greenback's performance against its major rivals.

EUR/USD News

GBP/USD struggles to pull away from 1.3800

GBP/USD retraced a portion of Wednesday's during the European trading hours pressured by the renewed USD strength and the souring market mood. With the latest US data failing to trigger a reaction, the pair stays in a consolidation phase near 1.3800.

GBP/USD News

XAU/USD struggles for direction, flat-lined above $1,780 level

The risk-off impulse in the markets extended some support to the safe-haven gold. Elevated US bond yields, a modest USD strength capped the upside for the metal. Bulls need to wait for a move beyond the $1,800 mark before placing fresh bets.

Gold News

Buying Solana now to gain 700% profits by 2022

Solana price has been on a massive run-up in 2021 from $1 to $216 in roughly eight months. This stellar climb is likely to continue into 2022 as significant bullish signs emerge. Moreover, the start of a new bull run will serve as a tailwind for SOL.

Read more

Netflix: Three reasons to sell NFLX after earnings

NFLX has been strong into earnings as investors digested the massive success of Squid Game and hoped this would feed through into very strong subscriber numbers. Netflix was out straight after the bell with earnings.

Read more

Forex MAJORS

Cryptocurrencies

Signatures