- The USD/JPY is trading little changed at around mid 109s as the market is awaiting fresh impulses from Brexit deal debate and the FOMC meeting on Wednesday.
- Falling corporate profits weigh on market sentiment with traditional safe havens benefiting from risk-off.
- The Brexit deal debate as a major risk factor is expected to provide fresh clues as the UK House of Commons is set to vote on amendments to Brexit deal.
The US Dollar is trading little changed around 109.50 level against the Japanese Yen on Tuesday as the market is waiting for the fresh impulse for Brexit deal debate in the UK parliament later today and the Fed meeting scheduled for Wednesday.
While the US prosecutors' allegations on China's smart-phone giant, Huawei Technologies Co., pulled the Japanese Yen (JPY) back from 109.50 against the US Dollar on Monday, optimism surrounding soft Brexit triggered USD/JPY upswing from 109.10 towards 109.40 during early European sessions on Tuesday.
American prosecutors filed criminal charges against Huawei Technologies Co. alleging them for stealing trade secrets from their US rivals and also for bank fraud by conducting business with Iran and violating the US sanctions. The news gave another blow to the US-China trade talks that are scheduled for the next two days as the world's two largest economies are at loggerheads on this point since long. With this, the Japanese Yen often considered a safe haven appreciated against its US counterpart by the yesterday close. Additionally, US-Venezuela crisis and sluggish results from Caterpillar and Nvidia Corp also pushed investors to traditional risk safeties like the JPY and the Gold.
The risk-off mood couldn't last long on Tuesday when the UK’s House of Commons holds a debate on Theresa May's Plan B. At the start of discussions Democratic Unionist Party (DUP) reacted positively to the May's proposal to replace backstop arrangements near Northern Ireland border with alternative plans. The same offered additional weakness to chances concerning no-deal Brexit and triggered risk-on around early UK timings.
Going forward, the UK Prime Minister Theresa May is still struggling to get support for her Plan B as it lacks clarity over major issues, including Irish border, which DUP might not favor for long.
Technically, the USD/JPY needs to overcome 109.80-90 horizontal area, including highs marked recently, in order to aim for the 110.25 resistance. In case the pair falls short of clearing the 109.95 resistance, chances of its pullback to the 109.10 and then to the 108.60 can't be denied.
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 trades with mild negative bias, manages to hold above $2,300 ahead of US data
Gold price (XAU/USD) edges lower during the early European session on Wednesday, albeit manages to hold its neck above the $2,300 mark and over a two-week low touched the previous day.
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.