USD/JPY: Political risks are still present – OCBC

FXStreet Insights Team FXStreet

USD/JPY was a touch softer amid pullback in UST yields while Japan wages continue to rise (4.1% y/y vs. 3% expected). The rise in wages remain consistent with Governor Ueda’s comments and this keeps hopes for policy normalisation alive. Pair was last at 148.18 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

US data risk to watch tonight

"Daily momentum and RSI indicators are not showing a clear bias for now. 2-way risks likely, with US data risk to watch tonight. Bias to lean against strength. Resistance at 148.80 (200 DMA), 149.20 levels. Support at 147.20 (50 DMA), 146.70 (38.2% fibo retracement of April low to August high)."

"Moving on, focus is on 8 September as LDP members submit responses to decide if the party presidential election should be brought forward. Earlier this week, 4 LDP members including Secretary-General Hiroshi Moriyama indicated their intention to step down after the review report on the upper house election in July was presented. Report had indicated nine factors on why voters are not supporting the LDP."

"This included the loss of trust brought on by money scandals, measures to deal with higher CPI, etc. It remains unclear if PM Ishiba will resign and if any new leadership will bring about any positive change. The risk of an earlier LDP election may temporarily undermine the JPY but politically-driven JPY depreciation is likely to reverse when the domestic house is in order."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.