|

USD/JPY: last minute attempt from the bulls with eyes on 111 handle again

  • Bulls have been held up on technical resistances, US dollar taking up safe haven status over the yen.
  • A break onto 111.00 opens risk towards May's 111.39 peaks for the week ahead.

Despite the sell-off in global stocks, USD/JPY has been in chop between the European lows of 110.60 and the Asian, overnight, highs of 111.06 with bulls taking back charge in the latter half of the NY session, moving out of a sideways drift to test the 110.80 level. 

Bulls have been held up on technical resistances while US yields underpin the dollar's upside as the spread favours the bullish trend and reversal of the late June downside from 110.75. Simultaneously, the dollar has picked up a safe haven bid as investors pull out of EMs and back Wall Street instead looking to safeguard idle capital. 

US data to see bulls through the 111 handle this week

From here, much will depend on fundamentals and supportive data to today's US manufacturing will lend support to the bulls case for the 111 handle and key targets there. 

(US June ISM manufacturing index 60.2 vs 58.5 expected, Markit US June manufacturing PMI 55.4 vs 54.7 expected).

We have the FOMC minutes on Thursday, (the pace of Fed balance sheet runoff increased to $40 Bln/month in Q3 (previous $30 Bln) dollar supportive as the dollar funding liquidity continues to get squeezed offshore), and the nonfarm payrolls on Friday while otherwise, the market's liquidity will continue to deplete due to the US holidays on Wednesday. 

USD/JPY levels

Bulls are back on top and look to May's 111.39 peaks for the week ahead. This 111.39 May high is in a congested area where the 161.8% of May low & 76.4% of the May drop was located. Further out, the 112.30's, (Fibos at 112.22/33) remain key upside target. On a bearish correction, below the 200-D SMA at 110.17, the Tenkan prop is located a cent lower at 109.19 that falls below the 109.36 key June support. 108.10 is the May 29 low.

Author

Ross J Burland

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

More from Ross J Burland
Share:

Editor's Picks

EUR/USD trims gains, back below 1.1800

EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.

GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.

Crypto Today: Bitcoin, Ethereum, XRP rebound as risk appetite improves

Bitcoin rises marginally, nearing the immediate resistance of $68,000 at the time of writing on Friday. Major altcoins, including Ethereum and Ripple, hold key support levels as bulls aim to maintain marginal intraday gains.

Week ahead – Markets brace for heightened volatility as event risk dominates

Dollar strength dominates markets as risk appetite remains subdued. A Supreme Court ruling, geopolitics and Fed developments are in focus. Pivotal Nvidia earnings on Wednesday as investors question tech sector weakness.

Ripple bulls defend key support amid waning retail demand and ETF inflows

XRP ticks up above $1.40 support, but waning retail demand suggests caution. XRP attracts $4 million in spot ETF inflows on Thursday, signaling renewed institutional investor interest.