- The Dollar remains steady above 133.40, with upside moves capped at 134.80/90.
- The Yen strengthens after the BoJ announces unscheduled bond purchase operations.
- USD/JPY: Breach of 130.40 support will trigger a deeper decline – SocGen.
The US Dollar’s mild rebound from intra-day lows at 133.50 is lacking follow-through right below the 133.80/90 resistance area, and the pair remains looking for direction within a 50-pip range, after retreating from the 134.50 area on Wednesday.
The BoJ announces more bond purchases
The Japanese currency appreciated about 0.6% during the Asian session, after the Bank of Japan announced two additional rounds of unscheduled bond purchase operations, responding to market speculation that points out to further relaxation of the bonds yield’s curve controls.
On the other end, the US Dollar is trading without a clear direction in a choppy post-Christmas market, with European stock markets picking up after a negative opening as concerns about China are dampening appetite for risk.
The exponential increase in COVID-19 infections has crushed investors’ enthusiasm about the end of the Zero-COVID policy and has dampened hopes of a quick economic recovery in China.
Recent reports revealing the high pressure that the new coronavirus wave is causing on the health system have moved some countries to impose restrictions on Chinese travelers. US Italy and India have already announced mandatory tests in arrivals from China and other countries are likely to follow suit.
On the macroeconomic front, with the Japanese calendar lacking relevant releases, in the US, the weekly jobless claims and oil stocks data could ofer a fresh boost to the US dollar crosses.
USD/JPY: Breach of 130.40 might trigger a further downtrend – SocGen
Currency analysts at Société Générale observe the pair biased lower and point out to 130.40 support: “The pair is now in the vicinity to August trough near 130.40. An initial bounce is not ruled out however 138 is likely to cap (…) Failure to defend 130.40 would mean a deeper downtrend. Next potential objectives could be at projections of 128 and 2015 levels of 125.85/124.00.”
Technical levels to watch
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 extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.