|

USD/JPY trades with modest losses, around mid-111.00s

   •  Global trade tensions continue to underpin JPY and capped gains.
   •  A follow-through USD buying helps limit immediate sharp downside. 
   •  Traders now eye US PPI print for some short-term opportunities.

The USD/JPY pair was seen consolidating overnight strong gains to near one-week tops and traded with a mild negative bias through the Asian session on Wednesday.

The pair found some fresh buying ahead of the 111.00 handle on Tuesday and was supported by a combination of positive factors. Renewed US Dollar demand, coupled with surging US Treasury bond yields and positive mood around the US equity markets pushed the pair beyond mid-111.00s.

However, escalating global trade worries kept investors on edge and kept a lid on any further up-move, at least for the time being. The risk-off mood was evident from the ongoing fall in Asian stocks, which benefitted the Japanese Yen's safe-haven status and exerted some downward pressure on Wednesday.

Meanwhile, a follow-through buying seen around the greenback continued extending some support. This coupled with today's disappointing release of BSI Manufacturing Index from Japan further collaborated towards limiting any immediate sharp downside, albeit a softer tone around the US bond yields failed to provide any fresh bullish impetus. 

Moving ahead, today's release of the US PPI print will now be looked upon for some short-term trading opportunities later during the early North-American session. The key focus, however, would be on this week's other important US macro data - Thursday's consumer inflation figures and monthly retail sales data on Friday, which should help investors determine the pair's next leg of directional move.

Technical levels to watch

Immediate resistance is pegged near the 111.70-75 region, above which the pair seems all set to reclaim the 112.00 handle and test 112.15-20 supply zone. On the flip side, any meaningful retracement is likely to attract some buying near the 111.35-30 region and is followed by a strong support near the 111.00 handle.
 

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Editor's Picks

AUD/USD remains below 0.7000 amid light trading

AUD/USD fills a modest bearish gap on Monday, but remains below 0.7000 in the Asian session amid holiday-thinned liquidity. The US Dollar attempts a bounce even as US bond yields pull back from multi-year highs, limiting the pair. Moreover, diminishing odds of another RBA rate hike in November cap the Aussie.

USD/JPY hovers above 158.00 amid Japan/ US holiday

USD/JPY extends its range-bound price action into a new week, trading above 158.00 as bulls remain on high alert amid speculation that authorities will step in to prop up the Japanese Yen. Meanwhile, softer US bond yields keep US Dollar bulls on the back foot and cap the pair's upside. However, geopolitical uncertainties could limit losses for the safe-haven buck amid thin liquidity due to a holiday in Japan and the US.

Gold remains vulnerable below $4,200 on Fed hike bets

Gold is under mild selling pressure on Monday, trading at around $4,170. The US Dollar advances modestly in thin trading, supported by bets that the Federal Reserve will hike rates at least one more time before year-end.

Bitcoin struggles as ETF outflows, geopolitical uncertainty weigh

Bitcoin hovers around $83,600 on Monday after a 3.1% correction last week. US-listed spot ETFs recorded an outflow of $681.10 million last week, snapping the three-week inflow streak. Geopolitical uncertainty and mixed signals keep investors cautious.

The week ahead: A critical week as earnings and CPI test market

The Oil price is relatively stable this morning, and US and European stock markets are poised to open higher, as risk sentiment shrugs off an escalation in the Middle East and concerns about rising bond yields.

Has Bitcoin really escaped the macro forces it was built to fight?
Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?