USD/JPY Performance: USD Bulls Rally Against Yen, Key Resistance Level Challenged
The past couple of months have been very unforgiving to the U.S dollar as political issues weighed down on its performance. However, things seem to be taking a different turn as the bulls rally in favor of the USD.
The rallying bulls sent the USD/JPY price levels surging, challenging the 108.85 resistance level. The USD/JPY chart indicates that the price has been hovering above its main Simple Moving Averages (SMA), thus highlighting the strong upward momentum over the medium term.
After challenging the 108.85 resistance level, the rallying bulls seem to have their sight set on the next resistance levels which are the 09.20 and 109.37 price levels, especially on the currency pair's 4-hour chart. The 30-minute chart also indicates that the currency pair’s price level is already over the key SMAs.
EUR/JPY maintains daily gains at around 121.70
The EUR/JPY has lately been demonstrating little movement as it maintains its range-bound chart performance with the currency pair price facing a support level at around 121.70. As far as the risk appetite and data are concerned, the price appears to have a main reversal point at around the mid-121.00 price range. Meanwhile, the rallies seem to be withheld from going past the 122.00 level.
The currency pair performance, therefore, seems to indicate a conservative risk appetite due to the cautious approach by investors. This may be the result of the adjustments that traders have had to make lately due to the narrowing likelihood of Federal Reserve rate cuts being implemented this month. This is on the heels of the strong payroll report in June.
The payroll report also fueled a rebound in US yields which have in turn maintained the current mood for the Japanese Yen. Meanwhile, the Euro continues to hold strong at around the 1.1230 range against the USD regardless of the unappealing Sentix index results.
Some of the key data from Europe that may have influenced the performance of the EUR/JPY currency pair include the German Trade Surplus. The latter expanded to €18.7 billion in May, with the same thing happening for Industrial production which had a 0.3% expansion within the same duration. However, the industrial production figures came in short of analyst projections.
Moving average performance
The 200-day SMA performance indicates that the EUR/JPY kicked off Monday’s performance well above. However, the price has been touching the 55-day and 21-day moving averages as the currency pair has been trading within a narrow range.
The narrow range for the EUR/JPY indicates that investors have kept their foot a bit off the gas pedal so that they can size up the market with the current uncertain economic and policy situation. As for the USD/JPY currency pair, there has been a notable increase in trade volume which also reflects the rally.
This is also in line with the clearing cloud of uncertainty especially with regards to the trade situation between China and the U.S. Nevertheless, investors are still keen on policy changes, especially interest rate decisions and their impact on the markets.