USD/JPY Analysis: poised to challenge the 109.00 high

Valeria Bednarik FXStreet

USD/JPY Current price: 108.79

BOJ’s expected to keep monetary policy steady in its July decision.
US Treasury yields edged modestly lower ahead of Fed’s meeting.
USD/JPY broke its latest range to the upside, bullish above 109.00.

The USD/JPY pair has reached a fresh three-week high of 108.89, surging during US trading hours, despite softer-than-expected US data. The Japanese currency weakened ahead of the Bank of Japan monetary policy meeting that would take place early Tuesday. The central bank has been applying massive stimulus measures, yet inflation remains depressed. Policymakers have little room to maneuver, as the risk of steepening easing is higher than the benefits it may bring to the economy. The fact that most major central banks are announcing different stimulus measures limits further Japanese policymakers capability of acting. Meanwhile, US Treasury yields eased daily basis with the yield on the benchmark 10-year Treasury note down to 2.05% from 2.07% Friday.

USD/JPY short-term technical outlook

The USD/JPY pair holds near the mentioned high, although losing the positive momentum in the short-term, as, in the 4 hours chart, technical indicators began easing from near oversold territory, although holding far from daily lows. The 20 SMA, continues heading north below the current level, currently providing a short-term support at around 108.50. The pair also stands above the 61.8% retracement of its latest daily decline, at 108.30. As long as it holds above this last, chances of a downward extension are quite limited, while the bullish potential will increase on a break above 109.00, where it peaked this July.

Support levels: 108.40 108.00 107.65

Resistance levels: 109.00 109.35 109.80

View Live Chart for the USD/JPY

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.