USD/JPY analysis: stuck at the lower end of its weekly range, bearish

Valeria Bednarik FXStreet

USD/JPY Current price: 112.35

Yen refuses to give up as US Treasury yields keep falling.
USD/JPY key resistance at 112.60 now, bearish below 112.00.

Despite broad-based dollar's strength, the USD/JPY pair refuses to advance and trades at the lower end of its weekly range, around the 112.30 level after hitting 111.98 early Asia. The poor performance of Asian and European equities backed yen's advance during the first half of the day, as all of the enthusiasm about the US tax reform and the EU-UK divorce agreement faded as the week passes with no fresh headlines. Nevertheless, Wall Street seems to be reverting the negative mood, with all of the three major indexes trading in the green. What's weighing on the pair are no doubts US Treasury yields, which have been slipping ever since the day started. The 10-year note yield is currently at 1.32% after ending Tuesday at 1.36%. The 2-year yield eased less than the 30-year note one, with the yield-curve flattening even further. An inverted yield-curve is seen as a sign of recession.

Japan will release its October leading and coincident indexes during the upcoming Asian session, with September readings having already suffered downward corrections and October numbers expected below them.

Technically, the 4 hours chart for the pair shows that the risk remains towards the downside, as despite it has managed to advance modestly above an anyway bearish 100 SMA, technical indicators hold within bearish territory, with very limited upward strength. The pair would need to accelerate through 112.60, the immediate resistance, to shrug off the negative stance, yet renewed selling interest below the 112.00 threshold will likely result in a slide towards the 111.20 region, a strong static support.

Support levels: 112.00 111.60 111.20

Resistance levels: 113.10 113.45 113.80

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 climbs to two-week highs beyond 1.1900

EUR/USD is keeping its foot on the gas at the start of the week, reclaiming the 1.1900 barrier and above on Monday. The US Dollar remains on the back foot, with traders reluctant to step in ahead of Wednesday’s key January jobs report, allowing the pair to extend its upward grind for now.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold treads water around $5,000

Gold is trading in an inconclusive fashion around the key $5,000 mark on Monday week. Support is coming from fresh signs of further buying from the PBoC, while expectations that the Fed could turn more dovish, alongside concerns over its independence, keep the demand for the precious metal running.

Crypto Today: Bitcoin steadies around $70,000, Ethereum and XRP remain under pressure

Bitcoin hovers around $70,000, up near 15% from last week's low of $60,000 despite low retail demand. Ethereum delicately holds $2,000 support as weak technicals weigh amid declining futures Open Interest. XRP seeks support above $1.40 after facing rejection at $1.54 during the previous week's sharp rebound.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.