- USD/JPY testing the 112 handle in Tokyo open.
- EUR/JPY lends USD/JPY bulls a helping hand.
USD/JPY has just popped onto the 112 handle and the trade war concerns linger, supporting the dollar that has otherwise taken a blow over the past few sessions and dropped back the 95 handle in the DXY. USD/JPY is currently trading at 112.01 having posted a high of 112.08 and just below the 112.14 key resistance.
Draghi was lowering the 2018 GDP forecasts, as expected, but he suggested that the European Union had grown above potential - inflation is on the way, in other words, which is supporting EUR/JPY and USD/JPY higher. USD/JPY has moved up 111.65/88 key pivot area and closes above there are critical for the bull's case that eye a test of the 113.18 July high. Meanwhile, the US Treasury yields have dropped and on the back of the CPI data miss but a move higher will certainly provide further support for the case to the upside. The yield on the benchmark 10-year Treasury note ended at 2.95% - bulls seek 3.00% psychological mark.
Key notes from US session:
Key events ahead:
Valeria Bednarik, Chief Analyst at FXStreet explained that in the 4 hours chart, USD/JPY recovered sharply from around the 100 and 200 SMA, which tested late Wednesday:
"The Momentum indicator stabilized above its 100 level and the RSI holds near overbought readings, both reflecting the current quietness rather than suggesting upward exhaustion. A key resistance is now 112.14, August monthly high, with selling interest most likely easing further on a break above it."
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 securities. 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 Forex 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.