- Bulls running out of steam, back to test 109 handle.
- Risk-off in equities underpinning the Yen demand?
The USD/JPY pair is seen reversing a part of the intraday rally, as the US dollar attempts a minor correction versus its major peers after the upsurge to the highest levels in three-months reached at 91.11.
The greenback’s rally was mainly fuelled by the 10-year Treasury yields’ climb above the key 3 percent levels, as markets turn optimistic on the US economic prospects, which could lead to a faster pace of Fed tightening in the coming months.
The latest leg down in the spot can be attributed to the sell-off in the global equities, which spooks the markets and underpins the demand for the Yen as a safe-haven. The US companies warned of higher borrowing costs amid rising Treasury yields, pointing towards the end of the corporate earnings boom.
In the session ahead, the pair will continue to track the USD price-action amid a lack of the US economic news, as attention turns towards Friday’s Bank of Japan (BoJ) monetary policy decision for fresh impetus on the Yen.
USD/JPY levels to watch
Karen Jones, Analyst at Commerzbank explains: “USD/JPY has reached the 50% retracement at 108.98 and directly above here lies the top of the cloud at 109.32. This may hold the initial test/provoke some consolidation, but beyond this, there is scope for the 200-day ma at 110.28. Key resistance remains the 112.44 2015-2018 downtrend. Dips lower will find initial support at the 107.24 20 day ma and the 105.66 current April low.”
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 hovers around 1.0700 after German IFO data
EUR/USD stays in a consolidation phase at around 1.0700 in the European session on Wednesday. Upbeat IFO sentiment data from Germany helps the Euro hold its ground as market focus shifts to US Durable Goods Orders data.
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 price flat lines above $2,300 mark, looks to US macro data for fresh impetus
Gold price (XAU/USD) struggles to capitalize on the previous day's bounce from over a two-week low – levels just below the $2,300 mark – and oscillates in a narrow range heading into the European session on Wednesday.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin (WLD) 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.