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.

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

 

 

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