USD/JPY pares early losses, holds steady around 110.00

USD/JPY staged a rebound after dropping to 110.70 area.
US Dollar Index clings to daily gains above 92.50.
Falling US Treasury bond yields limit USD/JPY's upside.

Eren Sengezer FXStreet

The USD/JPY pair snapped a three-day winning streak on Wednesday and lost more than 60 pips. Although the pair extended its slide to a weekly low of 109.71 in the early European session, it managed to stage a rebound and was last seen posting small daily gains at 110.05.

DXY recovers above 92.50

The renewed USD strength in the second half of the day helped USD/JPY gain traction. The risk-averse market environment helped the greenback find demand on Thursday and investors paid little to no attention to mixed macroeconomic data releases from the US.

The US Department of Labor reported earlier in the day that Initial Jobless Claims declined to 360K in the week ending July 10, marking the lower print since March of last year. Other data from the US showed that the NY Empire State Manufacturing Index rose sharply to 43 in July from 17.4 in June. On a negative note, the Philly Fed Manufacturing Index dropped to 21.9 from 30.7 and Industrial Production expanded by 0.4%, compared to market expectation of 0.7%.

Meanwhile, the 10-year US Treasury bond yield is losing nearly 2% on Thursday, making it difficult for USD/JPY to push higher.

On Friday, the Bank of Japan will announce its Interest Rate Decision and publish the Monetary Policy Statement. Previewing this event, "the BOJ is set to downgrade its forecast amid the spread of COVID-19 in Japan and around the world," said FXStreet analyst Yohay Elam. "That could weigh on the yen, albeit temporarily, as the currency is a safe-haven asset. Another beneficiary is the dollar, yet the yen usually has the upper hand."

BOJ Preview: Yen has room to (temporarily) fall on downgraded outlook, worrying virus state.

Technical levels to watch for

USD/JPY

Overview
Today last price	110.06
Today Daily Change	0.09
Today Daily Change %	0.08
Today daily open	109.97

Trends
Daily SMA20	110.59
Daily SMA50	109.87
Daily SMA100	109.33
Daily SMA200	106.86

Levels
Previous Daily High	110.7
Previous Daily Low	109.94
Previous Weekly High	111.19
Previous Weekly Low	109.53
Previous Monthly High	111.12
Previous Monthly Low	109.19
Daily Fibonacci 38.2%	110.23
Daily Fibonacci 61.8%	110.41
Daily Pivot Point S1	109.71
Daily Pivot Point S2	109.44
Daily Pivot Point S3	108.94
Daily Pivot Point R1	110.47
Daily Pivot Point R2	110.96
Daily Pivot Point R3	111.23

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD flirts with weekly lows near 1.1770

EUR/USD now comes under further selling pressure, breaking below the 1.1800 support to challenge the area of weekly throughs near 1.1770 on Thursday. The pair’s decline comes in response to marked gains in the US Dollar amid steady geopolitical tensions. Ealier in the day, the ECB’s Lagarde delivered cautious remarks, although the currency remained apathetic.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.