- The USD/JPY experienced a dip after struggling to maintain above the 100-day moving average near 148.00.
- In light of reports regarding Iran’s attacks on US Air Force bases in Qatar, the Japanese yen may see increased demand as a safe haven.
- The US Dollar Index has fallen below 99.00, influenced by mixed PMI data and dovish remarks from Bowman.
The Japanese yen is likely to recover from a five-week low, strengthening against the US dollar on Monday. Following the news of Iran’s actions in Qatar, there’s been a noticeable shift towards safe-haven currencies, with traders showing a preference for yen over the US dollar, dampening any gains for the USD/JPY after a recent technical surge.
The USD/JPY pair initially reached 148.03, maintaining upward momentum from the previous week, but it struggled to hold onto gains above the 100-day moving average, retreating to around 146.20 during US trading hours.
Meanwhile, the US Dollar Index (DXY), which gauges the dollar’s performance against a selection of six major currencies, dropped below the crucial 99.00 mark. At the last update, the index was hovering around 98.50, indicating a recent decrease in demand for the US dollar despite ongoing geopolitical tensions.
Recent PMI data from the US presented mixed signals; while manufacturing activity showed slight expansion, the services sector appeared to be slowing down. Additionally, Fed Governor Michelle Bowman mentioned that inflation is steadily aligning with targets, implying that the July meetings could potentially lead to adjustments that favor stable market expectations concerning summer policy changes.
From a technical viewpoint, the USD/JPY bulls initially drove the pair to a fresh high of 148.03 earlier on Monday. However, the momentum seemed to dissipate as the pair couldn’t gain traction above the critical 100-day moving average, a significant barrier that lies between 147.80 and 148.00.
This failure to maintain above the moving average prompted a noticeable pullback, bringing the pair back down to 146.20 by the current writing. Zones around 144.50-145.00 are regarded as key support, aligning with previous resistance levels, which could provide a foundation for the bulls if successfully defended.
The momentum indicators remain somewhat optimistic but suggest a short-term cooling trend. The relative strength index (RSI) is retreating into the mid-50s, distancing from overbought territory, while the moving average convergence divergence (MACD) hovers in positive territory but shows little movement. A daily close above 148.00 might open the door for upward movement towards 149.50 and potentially the psychological level of 150.00. Conversely, falling below 145.00 could signal a deeper descent toward the 50-day moving average around 144.14, jeopardizing the current breakout narrative and shifting the short-term outlook to neutral.
USD/JPY drops under 147.00 as the US Dollar weakens following mixed PMI data and comments from Fed Bowman
The Japanese yen is likely to recover from a five-week low, strengthening against the US dollar on Monday. Following the news of Iran’s actions in Qatar, there’s been a noticeable shift towards safe-haven currencies, with traders showing a preference for yen over the US dollar, dampening any gains for the USD/JPY after a recent technical surge.
The USD/JPY pair initially reached 148.03, maintaining upward momentum from the previous week, but it struggled to hold onto gains above the 100-day moving average, retreating to around 146.20 during US trading hours.
Meanwhile, the US Dollar Index (DXY), which gauges the dollar’s performance against a selection of six major currencies, dropped below the crucial 99.00 mark. At the last update, the index was hovering around 98.50, indicating a recent decrease in demand for the US dollar despite ongoing geopolitical tensions.
Recent PMI data from the US presented mixed signals; while manufacturing activity showed slight expansion, the services sector appeared to be slowing down. Additionally, Fed Governor Michelle Bowman mentioned that inflation is steadily aligning with targets, implying that the July meetings could potentially lead to adjustments that favor stable market expectations concerning summer policy changes.
From a technical viewpoint, the USD/JPY bulls initially drove the pair to a fresh high of 148.03 earlier on Monday. However, the momentum seemed to dissipate as the pair couldn’t gain traction above the critical 100-day moving average, a significant barrier that lies between 147.80 and 148.00.
This failure to maintain above the moving average prompted a noticeable pullback, bringing the pair back down to 146.20 by the current writing. Zones around 144.50-145.00 are regarded as key support, aligning with previous resistance levels, which could provide a foundation for the bulls if successfully defended.
The momentum indicators remain somewhat optimistic but suggest a short-term cooling trend. The relative strength index (RSI) is retreating into the mid-50s, distancing from overbought territory, while the moving average convergence divergence (MACD) hovers in positive territory but shows little movement. A daily close above 148.00 might open the door for upward movement towards 149.50 and potentially the psychological level of 150.00. Conversely, falling below 145.00 could signal a deeper descent toward the 50-day moving average around 144.14, jeopardizing the current breakout narrative and shifting the short-term outlook to neutral.
Related News
S&P 500 futures remain steady as important inflation data nears; traders watch oil prices and the situation in Iran: Live updates
Dow drops almost 300 points amid rising oil prices due to Iran conflict: Live updates