- USD/JPY gained traction for the fifth consecutive session on Wednesday.
- A modest USD pullback, the prevalent cautious mood capped the upside.
- The US macro data, Biden’s speech eyed for some trading opportunities.
The USD/JPY pair held on to its modest intraday gains through the mid-European session and was last seen trading around the 110.65 region, below the one-year tops set earlier this Wednesday.
The pair prolonged its recent strong upward trajectory and gained some follow-through traction for the fifth consecutive session. The momentum pushed the USD/JPY pair to the 111.00 neighbourhood, or the highest level since March 2020, though a combination of factors kept a lid on any further gains.
The prevalent cautious mood around the equity markets extended some support to the safe-haven Japanese yen. This, along with a modest US dollar pullback from four-month tops, held bullish traders from placing fresh bets and capped the upside for the USD/JPY pair, at least for the time being.
The yield on the benchmark 10-year US government bond struggled to capitalize on the overnight spike to levels beyond the 1.75% threshold, or 14-month tops. This, in turn, seemed to be the only factor that prompted some profit-taking around the greenback amid slightly overbought conditions.
That said, the prospects for a relatively faster US economic recovery from the pandemic helped limit the USD losses. Investors remained optimistic about the outlook for the US economy amid the impressive pace of coronavirus vaccinations and US President Joe Biden's spending plan.
Market participants now look forward to the US economic docket, highlighting the releases of ADP report on private-sector employment, Chicago PMI and Pending Home Sales. This will be followed by Biden's speech at 20:20GMT, which might provide a fresh impetus to the USD/JPY pair.
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 struggles to hold above 1.0400 as mood sours
EUR/USD stays on the back foot and trades near 1.0400 following the earlier recovery attempt. The holiday mood kicked in, keeping action limited across the FX board, while a cautious risk mood helped the US Dollar hold its ground and forced the pair to stretch lower.
GBP/USD approaches 1.2500 on renewed USD strength
GBP/USD loses its traction and trades near 1.2500 in the second half of the day on Monday. The US Dollar (USD) benefits from safe-haven flows and weighs on the pair as trading conditions remain thin heading into the Christmas holiday.
Gold hovers around $2,610 in quiet pre-holiday trading
Gold struggles to build on Friday's gains and trades modestly lower on the day near $2,620. The benchmark 10-year US Treasury bond yield edges slightly higher above 4.5%, making it difficult for XAU/USD to gather bullish momentum.
Bitcoin fails to recover as Metaplanet buys the dip
Bitcoin hovers around $95,000 on Monday after losing the progress made during Friday’s relief rally. The largest cryptocurrency hit a new all-time high at $108,353 on Tuesday but this was followed by a steep correction after the US Fed signaled fewer interest-rate cuts than previously anticipated for 2025.
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.