• The post-FOMC USD up-move fails to assist build on overnight strong up-move.
• Risk-off mood underpins JPY’s safe-haven demand and exerts downward pressure.
The USD/JPY pair traded with a mild negative bias through the Asian session on Friday and eroded a part of previous session strong up-move to five-week tops.
Resurgent US Dollar demand on Thursday helped the pair to build on the previous session's goodish rebound from sub-113.00 level, touched in the aftermath of the US midterm election results that showed a split Congress in the US.
The positive momentum accelerated further, lifting the pair to levels just above the 114.00 handle after the Fed maintained its hawkish stance with an upbeat assessment of the economy and reiterated its commitment to continue raising interest rates gradually in the future.
The post-FOMC USD up-move extended through early trading hours on Friday, albeit failed to provide any fresh bullish impetus. A softer tone around equity markets underpinned the Japanese Yen's safe-haven status and turned out to be one of the key factors keeping a lid on any further up-move.
A slight deterioration in investors' appetite for riskier assets was evident from a softer tone around the US Treasury bond yields, which further collaborated to the pair's ongoing retracement slide to fresh intraday lows, around the 113.85-80 region.
With the only scheduled release of the preliminary Michigan Consumer Sentiment Index for November, today's economic docket lacks any major market-moving economic data. Hence, the broader market risk sentiment might continue to act as an exclusive driver of the pair's momentum on the last trading day of the week.
Technical levels to watch
Any subsequent slide is likely to find support near the 113.70-65 region and is followed by the 113.45-40 region, below which the downfall could further get extended towards the 113.10-113.00 support area. On the flip side, the 114.00-114.05 region now seems to have emerged as an immediate resistance, which if cleared could accelerate the up-move further towards the 114.50-55 supply zone.
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 remains pressured below 1.0800 on renewed USD strength
EUR/USD stays under pressure and declines toward 1.0750 following Thursday's recovery. A renewed US Dollar uptick and a cautious mood weigh on the pair, as traders digest the Trump win and the Federal Reserve's monetary policy announcements.
GBP/USD holds lower ground near 1.2950 amid tepid risk sentiment
GBP/USD trades in negative territory at around 1.2950 in the second half of the day on Friday. The emergence of dip-buying in the US Dollar and a tepid risk tone undermine the pair. The BoE’s cautious rate cut could check the pair's downside as traders comments from central bankers.
Gold fluctuates below $2,700 amid stronger USD, positive risk tone
Gold trades below $2,700 in the early American session on Friday and is pressured by a combination of factors. Hopes that Trump's policies would spur economic growth and inflation, to a larger extent, overshadow the Fed's dovish outlook, which, in turn, helps revive the USD demand.
Week ahead – US CPI to shift market focus back to data after Trump shock
After Trump comeback, normality to return to markets with US CPI. GDP data from UK and Japan to also be important. But volatility to likely persist as markets assess impact of Trump.
October’s US CPI rates to be the next big test for the greenback
With the US elections being over, Trump getting elected and the Fed having released its interest rate decision, we take a look at what next week has in store for the markets. On the monetary front a number of policymakers from various central banks are scheduled to speak at some point or the other.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.