USD/JPY to simmer a push towards the 111.70/112.20 zone – Westpac

FXStreet Insights Team FXStreet

USD/JPY remains capped below 110.50. However, economists at Westpac still see a push towards 111.70/ 112.20 but further positive news needs to unfold, e.g. infrastructure plans be approved, and thus is likely delayed until the fall.

USD/JPY stuck in the 109.25-110.50 range

“We maintain the view that USD/JPY is stuck in a broad range – unable to push much above 110.50, unwilling to push much below 109.25. To be sure, the 108.72 mid last week tested the lower end of that range in a pretty material way. But the speed with which we bounced back reinforces the near-term outlook.”

“The big test for us will come late August and then late September. Does Powell lay out a pathway to taper at Jackson Hole Aug 26-28 and then follow up with a formal announcement Sep 21-22; and given this has become more of a consensus view, is this enough to lift the USD higher?”

“We still see a push towards 111.70/112.20. However, such a move requires further positive news to unfold e.g. infrastructure plans be approved and thus likely delayed until the fall.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

RBNZ set to pause interest-rate easing cycle as new Governor Breman faces firm inflation

The Reserve Bank of New Zealand remains on track to maintain the Official Cash Rate at 2.25% after concluding its first monetary policy meeting of this year on Wednesday.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.