USD/JPY tumbles to weekly lows after US jobless claims

Haresh Menghani FXStreet

The USD/JPY pair accelerated the bearish slide and broke through the 113.00 handle, dropping to a multi-day lows during early NA session.

Currently trading around 112.70 region, testing session lows, the pair came under some fresh selling pressure as market participants seemed unimpressed by comments from the US Treasury Secretary Steve Mnuchin, at an interview on CNBC.

Mnuchin said he wants to see "very significant" tax reform passed before Congress' August recess but failed to provide any specific details of the proposed reforms. He further added that new policies will have limited impact in 2017 and it could take until late 2018 to reach 3% GDP growth.

In addition, data released from the US showed initial jobless claims rose more-than-expected to 244K for the week ended Feb. 17, up from previous week’s 239K and 241K expected, and failed to provid any respite for the US Dollar bulls.

Later during the day, speeches from Atlanta Fed President Dennis Lockhart and Dallas Fed President Robert Kaplan would now be looked upon for some fresh impetus.

Technical levels to watch

A follow through weakness below 112.60 level (Feb. 17 low) could get extended towards 112.40-35 horizontal support, which if broken is likely to drag the pair below 112.00 handle towards testing its next support near 111.60 level.

On the upside, any recovery attempts back above 113.00 handle now seems to confront immediate strong resistance near 113.45-50 region, which if cleared could lift the pair back towards 113.75-80 resistance area, en-route 114.00 round figure mark.

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 112.65

33% Bullish
33% Bearish
33% Sideways

Bias Neutral

1 Month

Avg Forecast 114.51

62% Bullish
8% Bearish
31% Sideways

Bias Bullish

1 Quarter

Avg Forecast 115.76

61% Bullish
0% Bearish
39% Sideways

Bias Bullish

Author

Haresh Menghani

FXStreet

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

EUR/USD accelerates losses, focus is on 1.1800

EUR/USD’s selling pressure is gathering pace now, opening the door to a potential test of the key 1.1800 region sooner rather than later. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and the publication of the FOMC Minutes later in the day.

GBP/USD turns negative near 1.3540

GBP/USD reverses its initial upside momentum and is now adding to previous declines, revisiting at the same time the 1.3540 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold reclaims $5,000 and above

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs just above the key $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.