USD/JPY Review: Clocks six-month high, Yen loses safe haven appeal

USD/JPY clocked a six-month high despite risk-off sentiment.
Yen takes cues from Yuan and other Asian currencies.
The USD/JPY hourly chart shows overbought conditions, so the rally could stall for a few hours or a minor pullback could be in the offing.

Omkar Godbole FXStreet Contributor

The USD/JPY pair rose to 112.35 in Asia - the highest level in January despite escalating US-China trade tensions and the risk-off sentiment.

The Japanese Yen is increasingly taking cues from the sliding Asian currencies, especially the Chinese Yuan as broad realignment is underway due to anticipated changes in terms of trade, according to Reuters.

So, the traditional Intermarket correlations have broken down, i.e. JPY is not responding to risk aversion. For instance, Dow Jones Industrial Average (DJIA) fell more than 200 pips, still, USD/JPY has found acceptance above 112.00

The currency pair has cleared a key long-term falling trendline hurdle and could rise to 113.00 if the US consumer price index, scheduled for release at 12:30 GMT today, beats estimates.

As of writing, the USD/JPY pair is trading at 112.28 and looks overbought as per the 14-hour relative strength index (RSI). So, the currency pair could trade in the sideways manner over the next few hours or could see a minor pullback to 112.00.

Hourly chart

Spot Rate: 112.28

Daily High: 112.35

Daily Low: 111.91

Trend: Intraday overbought conditions

Resistance

R1: 113.00 (psychological level)

R2: 113.23 (200-week moving average)

R3: 113.75 (December 2017 high)

Support

S1: 112.06 (10-hour moving average)

S2: 111.34 (50-hour moving average)

S3: 110.97 (100-hour moving average)

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying

The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.