- DXY remains under pressure below the 94 handle.
- US stocks start the day in the red and extend losses.
- Falling US T-bond yields weigh on the greenback.
The USD/JPY plummeted to a daily low at 113.30 on during the first half of the NS session on Tuesday before making a modest recovery. As of writing, the pair was trading at 113.53, losing 0.1% on the day.
JPY takes advantage of weak market sentiment
Major equity indexes in the U.S. started the day lower on Tuesday and failed to retrace its losses as falling crude oil prices and a heavy sell-off in GE shares for the second straight day weighed on the energy sector. At the moment, both the Dow Jones Industrial Average and the S&P 500 indexes are losing 0.2%. In the meantime, following yesterday's consolidation, the 10-year US T-bond yield lost traction and was last seen down 0.75% on the day.
The JPY as a traditional safe-haven found demand as the risk appetite remained low on the day. Additionally, a broad-based sell-off seen in the greenback pulled the pair even lower. The US Dollar Index, which had been able to hold above the 94 handle since late October, dropped 93.85 in the session. At the time of writing, the DXY was down 0.5% on the day at 93.90. Today's upbeat PPI data from the U.S. failed to help the index retrace its losses amid some dovish comments from the Fed's Bullard.
- Fed's Bullard: Current interest rate level likely to remain appropriate over near-term
- US: PPI for final demand rises 0.4% in October
In the early trading hours of the Asian session on Wednesday, the GDP growth data from Japan could be the next catalyst for the pair. Markets expect the annual GDP growth to improve to 0.1% from -0.4% on a yearly basis in the third quarter. A higher-than-expected reading should be able to provide an additional boost to the JPY.
Technical outlook
Despite today's retreat, the pair continues to trade in its three-week-old range and struggles to make a decisive move in either direction. The first technical support for the pair could be seen at 113 (psychological level/50-DMA), 112.10 (Oct. 18 low) and 111.45 (100-DMA/200-DMA). On the upside, resistances could be seen at 113.75 (20-DMA), 114.35 (Nov. 7 high) and 114 (psychological level).
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 fluctuates near 1.0700 after US data
EUR/USD stays in a consolidation phase at around 1.0700 in the American session on Wednesday. The data from the US showed a strong increase in Durable Goods Orders, supporting the USD and making it difficult for the pair to gain traction.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold keeps consolidating ahead of US first-tier figures
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.