- N.Korea risk dialled back, but volatility picking up.
- US yields were a theme following a downturn in the Europen yields.
USD/JPY had switched back to the upside, taking on the end of Wall Street high but then turned lower again as volatility picks up. USD/JPY is currently trading at 108.20, between 108.12 and 108.23, up from 107.94.
In recent trade, there was some attention given to North Korea on the news that two unidentified projectiles were fired into the East Sea as North Korea gets frustrated by lack of progress in talks with the US. The launch appears to resemble the May 2019 firing of two short-range missiles, which travelled approximately 260 miles and was fired from the Wonson area.
"Our military, in preparation for additional launches, is maintaining (its) readiness posture by monitoring related movements,"
an official in the South Korean Joint Chiefs of Staff office said.
However, in more recent trade, the risks have been dialled down:
Japanese government source: 'No impact on Japan's national security'
- Projectiles were two short-range ballistic missiles.
- Missiles did not reach Japan's Exclusive Economic Zone.
- No impact on Japan's national security.
Meanwhile, overnight, yields were a theme following a downturn in the Europen yields ahead of today's ECB meeting expected to be dovish. the US 2-year treasury yields initially dropped from 1.83% to 1.80%, steady at 1.82%, while 10-year yields fell from 2.08% to 2.04%. Looking ahead to the Federal Reserve, markets have priced in a 30bp of easing at the 31 July meeting (from 29bp the previous day).
Looking ahead, it is all about the US Gross Dometic Produce. However, ahead of that, we have the June durable goods orders and wholesale inventories data. "Core capital goods shipments – a proxy for business investment – are expected to decline 0.2% leaving the average for Q2 up 0.4% on the average for Q1," analysts at Westpac explained.
USD/JPY levels
Valeria Bednarik, the Chief Analyst at FXStreet, explained that the USD/JPY pair is holding just above the 50% retracement of the July’s decline, where it also has the 100 and 200 SMA in the 4 hours chart, with the indicators still directionless:
"The 61.8% retracement of the same slide continues capping advances, although the relevant resistance is the 108.40 region, where the pair topped for most of the previous week."
"Technical indicators in the mentioned chart hold into positive ground, having bounced just modestly from their midlines but currently lacking enough directional strength. The pair is short-term neutral and would need to advance beyond the mentioned resistance area to turn positive, while bulls’ chances would likely decline on a break below 107.90."
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 edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.