• US political jitters/trade-war fears continue to weigh on the USD.
• A modest rebound in equities help limit deeper losses.
• Had a rather muted reaction to mixed US housing market data.
The USD/JPY pair remained heavily offered tone through the early European session but has managed to recover few pips from session lows touched in the last hour.
The recent US political jitters, along with growing concerns over a potential global trade war, kept exerting downward pressure on the US Dollar and turned out to be one of the key factors weighing on the major.
However, a modest rebound across European bourses, and indications of a mildly positive opening in the US equity markets dented the Japanese Yen's safe-haven appeal and assisted the pair to bounce off lows.
Meanwhile, today's mixed US housing market data did little to influence the pair's momentum, albeit helped limit deeper losses, at least for the time being. A lower-than-expected fall in building permits was largely negated by a steeper drop in housing starts and hence, failed to provide any meaningful impetus.
Today's US economic docket also features the release of industrial production data and Prelim UoM Consumer Sentiment, but again seems to pass unnoticed, with broader market risk sentiment and the US political development acting as key determinants of the pair's momentum on the last trading day of the week.
Technical outlook
Valeria Bednarik, American Chief Analyst at FXStreet writes: “The pair is bearish according to technical readings in the 4 hours chart, as it continues trading below its 100 and 200 SMAs, while the Momentum indicator resumes its decline within negative territory, reaching fresh monthly lows. The RSI indicator in the mentioned chart is stable around 35, with no certain directional strength. The immediate support is the 105.24 level, February low, with a break below the level exposing the 104.60 region for the upcoming US session.”
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 retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.