USD/JPY snaps three-day downtrend towards regaining 109.00 as Tokyo open welcomes risk-on mood

USD/JPY keeps bounce off two-week low, refreshes intraday top of late.
Market sentiment improved as downbeat US jobs defy odds of Fed’s tapering.
Vaccine news, covid updates and ongoing Iran nuclear deal add to the optimism.
An absence of major data/events highlights risk-catalysts for near-term direction.

Anil Panchal FXStreet

USD/JPY refreshes intraday high with 108.78, stay on the front foot, as markets in Tokyo open for Monday. In doing so, the risk-barometer portrays the traders’ upbeat mood after Friday’s US data back the extension of easy money policies. Also on the positive side could be the latest updates concerning the coronavirus (COVID-19), Iran and vaccinations.

Risk-on it is…

The disappointment over Friday’s US monthly jobs report favored equity buyers and dragged down the US dollar index (DXY) the previous day. However, receding challenges to the US Federal Reserve’s (Fed) easy money policies triggered market optimism, which in turn propels USD/JPY, afterward.

It should be noted that the European Union (EU) ability to sign a major vaccine deal with the Pfizer-BioNTEch as well as Iran’s no dumping of the nuclear talks with the US, surprisingly, add to the latest risk-on mood.

Alternatively, Brexit jitters and political uncertainty in the UK, as well as the covid woes in Japan, test the bulls. “Japan's confirmed daily coronavirus infections topped 6,000 for the third straight day on Sunday, while the number of patients with severe symptoms rose to a record 1,144, amid the spread of more contagious variants,” said Kyodo News.

Amid these plays, US 10-year Treasury yields regain 1.60% level, up 2.1 basis points (bps), whereas S&P 500 Futures gain 0.26% while Nikkei 225 marks a 0.92% intraday gain by the press time.

Looking forward, Japan’s covid concerns may join a light calendar to dent the USD/JPY upside towards 109.00. However, market optimism seems to back the bulls, for now.

Technical analysis

Despite bouncing off a 50-day EMA level near 108.40, USD/JPY buyers need to close beyond the immediate hurdle around 108.85, comprising 21-day SMA, to convince the markets.

Additional important levels

Overview
Today last price	108.78
Today Daily Change	0.13
Today Daily Change %	0.12%
Today daily open	108.65

Trends
Daily SMA20	108.71
Daily SMA50	108.9
Daily SMA100	106.62
Daily SMA200	105.88

Levels
Previous Daily High	109.29
Previous Daily Low	108.34
Previous Weekly High	109.7
Previous Weekly Low	108.34
Previous Monthly High	110.85
Previous Monthly Low	107.48
Daily Fibonacci 38.2%	108.7
Daily Fibonacci 61.8%	108.93
Daily Pivot Point S1	108.23
Daily Pivot Point S2	107.81
Daily Pivot Point S3	107.27
Daily Pivot Point R1	109.18
Daily Pivot Point R2	109.71
Daily Pivot Point R3	110.13

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.