|

USD/JPY recovers a major part of early slide to over 1-week lows, retakes 112.00 mark and beyond

   •  A fresh wave of global risk-aversion trade underpinned JPY’s safe-haven status.
   •  A modest USD retracement from 2-month tops added to the selling pressure.
   •  Initial signs of stability helped bounce off lows ahead of US durable goods orders.

The USD/JPY pair has managed to recover a major part of its early decline to over one-week lows and was now seen building on the momentum further beyond the 112.00 handle.

The pair extended this week's retracement slide from the vicinity of the 113.00 handle and kept losing ground for the third consecutive session. The spill-over effect of the overnight rout in the US equities to the Asian markets on Thursday was seen underpinning the Japanese Yen's safe-haven appeal and eventually weighing on the major. 

Adding to this, a modest US Dollar retracement from over two-month tops, combined with a weaker tone around the US Treasury bond yields exerted some additional downward pressure and dragged the pair to an intraday low level of 111.82.

However, a calmer start for the US equity futures pointed to some stability in equity markets and helped ease the bearish pressure. The pair has now recovered around 30-35 pips from lows and is currently trading around the 112.15 region. 

Apart from the broader market risk sentiment, today's important US macro data - durable goods orders and pending home sales data, will now be looked upon for some fresh impetus later during the early North-American session.

Technical levels to watch

A follow-through recovery beyond the 112.20 level is likely to get extended towards the 112.65-70 region, above which the pair is likely to make a fresh attempt towards reclaiming the 113.00 handle. On the flip side, the 111.80-75 zone might continue to protect the immediate downside and is closely followed by 100-day SMA support near the 111.55 region, which if broken might turn the pair vulnerable to extend its downfall in the near-term.
 

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD rebounds after falling toward 1.1700

EUR/USD gains traction and trades above 1.1730 in the American session, looking to end the week virtually unchanged. The bullish opening in Wall Street makes it difficult for the US Dollar to preserve its recovery momentum and helps the pair rebound heading into the weekend.

GBP/USD steadies below 1.3400 as traders assess BoE policy outlook

Following Thursday's volatile session, GBP/USD moves sideways below 1.3400 on Friday. Investors reassess the Bank of England's policy oıtlook after the MPC decided to cut the interest rate by 25 bps by a slim margin. Meanwhile, the improving risk mood helps the pair hold its ground.

Gold stays below $4,350, looks to post small weekly gains

Gold struggles to gather recovery momentum and stays below $4,350 in the second half of the day on Friday, as the benchmark 10-year US Treasury bond yield edges higher. Nevertheless, the precious metal remains on track to end the week with modest gains as markets gear up for the holiday season.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid bearish market conditions

Bitcoin (BTC) is edging higher, trading above $88,000 at the time of writing on Monday. Altcoins, including Ethereum (ETH) and Ripple (XRP), are following in BTC’s footsteps, experiencing relief rebounds following a volatile week.

How much can one month of soft inflation change the Fed’s mind?

One month of softer inflation data is rarely enough to shift Federal Reserve policy on its own, but in a market highly sensitive to every data point, even a single reading can reshape expectations. November’s inflation report offered a welcome sign of cooling price pressures. 

XRP rebounds amid ETF inflows and declining retail demand demand

XRP rebounds as bulls target a short-term breakout above $2.00 on Friday. XRP ETFs record the highest inflow since December 8, signaling growing institutional appetite.