The USD/JPY pair struggled to build on overnight sharp recovery from over 4-months and remained capped below the key 110.00 psychological mark.
The pair on Tuesday witnessed a dramatic reversal and rebounded in excess of 160-pips from lows, touched in wake of global flight to safety on escalating geopolitical tensions in the Korean peninsula. A smart US Dollar recovery from over 2-1/2 year lows turned out to a key driver of the pair's sharp recovery during NY session.
• Goldman Sachs: ‘The dollar is very, very attractive right now’
The up-move, however, lacked any follow through momentum despite improving investors' risk appetite, which tends to weigh on the Japanese Yen's safe-haven appeal. Today's better-than-expected Japanese retail sales data seems to be the only factor capping the pair's up-move, at least for the time being.
Moreover, traders also seemed to wait on the sidelines ahead of today's important US economic data - ADP report on the US private sector employment and the first revision of US growth numbers, due later during the NA session.
• US Prelim Q2 GDP to be revised higher - Barclays
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes: "The spot is likely to take out the trend line hurdle of 110.13 and extend recovery from yesterday’s low of 108.27 to 111.19 [50-DMA] levels. On the downside, only an end of the day close below 109.00 would signal bullish invalidation."
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 regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.