• Trump’s comments keep exerting downward pressure on the USD.
• Fed rate hike expectations might help limit further downside.
The USD/JPY pair remained under some selling pressure at the start of a new trading week and fell below the 111.00 handle, or 1-1/2 week lows.
The pair extended last week's sharp retracement slide from six-month tops and continued losing ground for the third consecutive session amid persistent US Dollar weakness, triggered by the US President Donald Trump's comments.
During an interview with CNBC, Trump upped the ante on the trade war front and said that he was prepared to impose tariffs on all $505 billion in Chinese goods imported to the US. Trump also criticized the Fed's monetary tightening and showed displeasure over the recent USD strength.
Market participants, however, remain convinced that the Fed will stick to its plan to raise interest rates at least two more time in 2018 and the same was evident from the US Treasury bond yields. In fact, the benchmark 10-year yield held around the three-week high level of 2.89% and might now contribute towards limiting further downside.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes: “A close below the rising trendline would only validate the bearish Doji reversal and indicate the rally from the March 26 low od 104.63 has ended. As a result, the spot risks falling to 110.52 (ascending 50-day MA) and may test demand at the 200-day MA support of 110.10.”
“A strong rebound from the trendline support would and a close above 111.40 (May 21 high) would shift risk in favor of a re-test of 113.17 (Thursday's high),” he adds further.
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.