USD/JPY looks for clear direction around 10-month top above 112.00


  • USD/JPY stay modestly changed following its run-up to multi-week high.
  • Downbeat fundamentals at Japan seems to dim its safe-haven appeal, broad US dollar strength adds to the pair’s fuel.
  • Japan’s inflation/activity numbers can offer immediate direction.

Following its rally to the highest levels since April 2019, USD/JPY steps back to 112.10 amid the initial trading hours of Friday’s Asian session. With the deteriorating economics from Japan, the Japanese yen seems to lose its allure as a risk-free currency and loses heavily against the US dollar despite rising coronavirus fears.

Is the safe-haven in danger?

With the disappointing Japanese growth numbers for the fourth quarter (Q4) 2019, the BOJ’s age-old status-quo is in question while some in the market, including the International Monetary Fund (IMF), doubting the central bank’s inflation expectations. As a result, the safe-haven currency seems to have lost its allure off-late. However, traders will still look for more inflation as policymakers from Japan are keeping the doors open for further expansionary/fiscal measures to cope-up with the problems.

Risk-tone remains weak and the US fundamentals are strong…

China’s coronavirus is spreading heavily into the neighbor nations and the frequent changes to count the numbers at home have also contributed to the market’s risk-off.

As a result, the US 10-year treasury yields trim five basis points (bps) to 1.59% while the US dollar remains as the market favorite.

In addition to the risk aversion, strong reading of the US Philadelphia Fed Manufacturing Survey signals that the world’s largest economy is still unaffected due to the coronavirus.

Markets are now awaiting Japan’s National Consumer Price Index, Jibun Bank Manufacturing PMI and All Industry Activity Index for the immediate direction while the US data can entertain momentum traders during the rest of the day. However, updates from China will keep the driver’s seat.

Technical Analysis

A sustained break of April 2019 top surrounding 112.40 becomes necessary for the bulls to take aim at 112.80 and 113.00. In the absence of which, overbought RSI could keep flashing the warning of a pullback to 110.80.

Additional important levels

Overview
Today last price 112.11
Today Daily Change 0.87
Today Daily Change % 0.78%
Today daily open 111.24
 
Trends
Daily SMA20 109.55
Daily SMA50 109.44
Daily SMA100 109.02
Daily SMA200 108.39
 
Levels
Previous Daily High 111.59
Previous Daily Low 109.85
Previous Weekly High 110.14
Previous Weekly Low 109.56
Previous Monthly High 110.29
Previous Monthly Low 107.65
Daily Fibonacci 38.2% 110.93
Daily Fibonacci 61.8% 110.51
Daily Pivot Point S1 110.2
Daily Pivot Point S2 109.15
Daily Pivot Point S3 108.45
Daily Pivot Point R1 111.94
Daily Pivot Point R2 112.64
Daily Pivot Point R3 113.69

 

 

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD hits fresh one-month low amid souring market mood

EUR/USD has been extending its falls and dips below 1.21 as US retail sales badly disappointed and the worsening mood is supporting the safe-haven dollar. Markets digest Biden's stimulus plan. US Consumer Sentiment declined to 59.2 points. 

EUR/USD News

GBP/USD retreats toward 1.36 amid fresh dollar strength

GBP/US has pared its gains and falls toward 1.36 as the dollar gains ground. The UK economy shrank by 2.6% in November, better than estimated. The UK is ramping up its vaccination campaign and PM Johnson is pressured to ease the lockdown. 

GBP/USD News

Gold extends sideways grind near $1,850

The XAU/USD pair registered small daily gains on Thursday but struggled to extend its recovery amid a lack of significant fundamental drivers on Friday. As of writing, the pair was up 0.15% on a daily basis at $1,849.

Gold news

Forex Today: Markets “sell the fact” on Biden's stimulus, dollar rises, retail sales eyed

Markets are on the back foot after Biden hinted about tax hikes while introducing stimulus. The safe-haven dollar is edging higher despite Powell's pledge to keep monetary policy accommodative. 

Read more

DXY breaks above key downtrend, eyes move above 91.00

USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.

US Dollar Index News

Forex MAJORS

Cryptocurrencies

Signatures