- USD/JPY struggles to keep the previous day’s bounce from seven-week low.
- COVID-19 conditions in Asia joins US stimulus deadlock and geopolitical-trade headlines to challenge previous risk-on mood.
- Pre-ECB cautious sentiment adds to the upside filters.
USD/JPY sellers attack 108.00 during the fresh pullback from the intraday top, down 0.10% on a day, amid the initial hour of Tokyo open on Thursday. The downside move defies corrective pullback in Japan’s Nikkei 225 amid fresh challenges, mainly from the coronavirus (COVID-19) frontier.
Other than the looming risks over the third emergency in Tokyo and surrounding prefectures, India’s all-time high infections, recently above 300K, also test the sentiment. On the same line were chatters over the need for the covid vaccine jab.
Additionally, Global Times’ (GT) indirect hint over Beijing’s upcoming punitive measures over Australia joins the league of the US-China and the Russia-Ukraine tussles to weigh on the mood.
It’s worth mentioning that the deadlock over US President Joe Biden’s $2.25 trillion stimulus and the cautious sentiment ahead of the European Central Bank (ECB) monetary policy meeting is an extra burden on the risks.
On Wednesday, market sentiment cheered the Bank of Canada’s (BOC) 25% reduction in the weekly bond-purchase target as well as chatters over the US economic recovery.
Against this backdrop, Japan’s Nikkei 225 gains 1.25% but S&P 500 Futures drop 0.20% by the press time.
Looking forward, the ECB meeting will be the key event of the day while the US figures on weekly Jobless Claims and monthly data on housing, as well as Chicago Fed National Activity Index, will direct near-term USD/JPY moves. Also, the Japanese government is yet to announce the emergency decision, which will be observed closely, whereas the US decision over Johnson & Johnson vaccines, up for Friday, may as well be crucial to follow.
Read: European Central Bank Preview: Five reasons for Lagarde to lift the euro
Technical analysis
Wednesday’s Doji near multi-day low backs the corrective pullback towards crossing 50-day SMA around 108.20. However, an ascending trend line from March 10, previous support near 108.55, could challenge the quote’s further recoveries.
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 daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.