11 Aug 2015
USD/JPY clinging to gains near 124.80
FXStreet (Mumbai) - The US dollar keeps the upper hand versus its Japanese counterpart, with USD/JPY retaining gains below 125 handle, as traders continue to favour the US currency amid risk-off sentiments that hit across the FX board following the recent PBOC shocking price action.
USD/JPY capped at 125.07
Currently, the USD/JPY pair trades 0.17% higher at 124.84, failing to retain 125 handle on yet another occasion. The bid tone around the USD/JPY pair remains intact in the mid-European session, with the US dollar now re-attempting a bounce towards 125 barrier against the yen.
The Asian currencies, including the Japanese yen were badly hurt by the Chinese central bank’s unexpected Yuan devaluation, lowering it nearly 2% against the US dollar. The latest PBOC price action stemmed from the poor China trade data released over the weekend which refuelled slowdown concerns in the world’s second largest economy.
According to analysts at ANZ, "After holding onshore spot at 6.21 for so long, it is hard to see them just letting it go. What is clear is that a stable CNY had served as an anchor of some sorts for the rest of USD/Asia these past few months. This is no longer the case. A higher USD/CNY will pressure USD/Asia up."
Looking ahead, markets now shift focus to a set of US macro data lined up release later today ahead of BOJ monetary policy minutes and Japan’s industrial production data due tomorrow.
USD/JPY Technical Levels
To the upside, the next resistance is located 125.07 (Today’s High) levels and above which it could extend gains 125.69 (June 8 High) levels. To the downside immediate support might be located at 124.32 (June 5 Low) below that at 124 levels.
USD/JPY capped at 125.07
Currently, the USD/JPY pair trades 0.17% higher at 124.84, failing to retain 125 handle on yet another occasion. The bid tone around the USD/JPY pair remains intact in the mid-European session, with the US dollar now re-attempting a bounce towards 125 barrier against the yen.
The Asian currencies, including the Japanese yen were badly hurt by the Chinese central bank’s unexpected Yuan devaluation, lowering it nearly 2% against the US dollar. The latest PBOC price action stemmed from the poor China trade data released over the weekend which refuelled slowdown concerns in the world’s second largest economy.
According to analysts at ANZ, "After holding onshore spot at 6.21 for so long, it is hard to see them just letting it go. What is clear is that a stable CNY had served as an anchor of some sorts for the rest of USD/Asia these past few months. This is no longer the case. A higher USD/CNY will pressure USD/Asia up."
Looking ahead, markets now shift focus to a set of US macro data lined up release later today ahead of BOJ monetary policy minutes and Japan’s industrial production data due tomorrow.
USD/JPY Technical Levels
To the upside, the next resistance is located 125.07 (Today’s High) levels and above which it could extend gains 125.69 (June 8 High) levels. To the downside immediate support might be located at 124.32 (June 5 Low) below that at 124 levels.