- USD/JPY has sensed immense pressure as US banking jitters have eased.
- US Treasury Liang reported the US government will use its tools to prevent contagion in the banking sector.
- Liquidity assurance from US authorities for a potential banking crisis has infused confidence among investors.
The USD/JPY pair has witnessed an intense sell-off after failing to sustain above 131.50 in the Asian session. The asset has observed significant offers led by an extended correction in the US Dollar Index (DXY). The USD Index has stretched its downside to near 102.60 quickly as banking instability in the United States has started easing.
After the expansion of emergency liquidity assistance and the announcement of the acquisition of deposits and loans of failed Silicon Valley Bank (SVB) by First Citizens BancShares, Treasury Undersecretary for Domestic Finance Nellie Liang stated, “The US government will continue using its tools to prevent contagion in the banking sector, as warranted, to ensure Americans’ deposits are safe,” as reported by Reuters.
Meanwhile, S&P500 futures have generated minimal gains after a positive Monday as liquidity assurance from US authorities for a potential banking crisis has infused confidence among the market participants, portraying a risk-on mood.
USD/JPY has sensed selling pressure from the upper portion of the Falling Channel chart pattern formed on a four-hour scale. In a Falling Channel chart pattern, every pullback is considered a selling opportunity by the market participants.
The 50-period Exponential Moving Average (EMA) at 131.80 is acting as a major barricade for the US Dollar bulls.
The Relative Strength Index (RSI) (14) is oscillating in the bearish range of 20.00-60.00 and has not shown any sign of a reversal yet.
A break below March 27 low at 130.50 would drag the asset towards March 24 low at 129.64 followed by the horizontal support plotted from February 02 low at 128.08.
In an alternate scenario, a confident break above March 27 high at 131.76 will drive the asset toward March 13 low at 132.29. A breach of the latter will drive the major toward March 22 high at 133.00.
USD/JPY four-hour chart
-638155638684633964.png)
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 closes in on 1.0700 amid broad USD strength
EUR/USD came under renewed bearish pressure in the American session and dropped to its lowest level since late March near 1.0700. Stronger-than-forecast PCE inflation data and hawkish comments from Fed's Mester provide a boost to the US Dollar and weigh on the pair.
GBP/USD loses bullish momentum after US data, falls below 1.2350
GBP/USD has reversed its direction and erased a large portion of its daily gains on Friday after the data from the US showed that the annual core PCE inflation edged higher to 4.7% in April. Although the pair clings to small daily gains below 1.2350, it remains on track to end the third straight week in negative territory.
Gold erases daily gains, holds above $1,940
Gold price turned south and declined to the $1,940 area in the American session on Friday. The benchmark 10-year US Treasury bond yield holds stead above 3.8% after stronger-than-expected core PCE inflation data from the US, not allowing XAU/USD to gain traction.
Ethereum price to outpace Bitcoin price as ETH jumps over key hurdle where BTC fumbles
ETH is working on its recovery after it dipped to a two-week low on Thursday. While Bitcoin price has failed to make a similar move and head back above $26,500, Ethereum is outpacing Bitcoin and has been able to push above $1,800.
Ford Stock: New agreement will give customers access to 12,000 Tesla chargers
Ford (F) stock has advanced about 2.5% early Friday following CEO Chris Farley’s announcement that Ford owners will be able to charge their EVs at Tesla Superchargers beginning in early 2024.