- The greenback was on the backfoot overnight on the comments from the People’s Bank of China d.
- Technical indicators are entering bearish territory with downward slopes.
USD/JPY is started out Tokyo with a bearish bias, currently trading at 110.37 having traded a couple of pips above the 111 handle yesterday, slipping throughout European and North American markets to a current low of 110.35 on dollar weakness. The greenback was on the backfoot overnight on the comments from the People’s Bank of China declaring that the yuan would be stable. (USD/CNY rose above 6.70 for the first time since August 2017).
The sentiment weighed heavily on the dollar and the DXY closed NT down -0.29% having traded better offered between and overnight range of 94.5620-94.9780. As for treasuries, the US 10yr treasury yield fell from 2.88% to 2.83%, while 2yr yields fell from 2.56% to 2.53%. Fed fund futures yields continued to price 1 ½ more hikes in 2018 The Fed fund futures yields continued to price 1 ½ more hikes in 2018.
Wall Street was also on the downbeat and this helped USD/JPY bears along the way down, aided by weaker treasury yields where a correlation in the pair to lower oil, (ran shipping threat), was also evident.
The week ahead:
For the week ahead, US markets are closed tonight but there are plenty of key events coming up from the calendar, including ADP private employment, initial jobless claims, ISM non-manufacturing index and the FOMC minutes. This all comes before the nonfarm payrolls on Friday as the main event.
USD/JPY levels
Valeria Bednarik, chief analyst at FXStreet explained that the 4 hours chart for the pair shows that the price remains above its 100 and 200 SMA”
“Technical indicators are entering bearish territory with downward slopes, leaning the scale toward the downside. The 110.15 price zone has proved strong in the past, and unless risk aversion kicks in, buyers will likely appear around it to defend it.”
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