- USD remains under pressure despite thin trading volume.
- 100-DMA and 200-DMA levels form a strong resistance for USD/JPY.
- Markit PMI data from the U.S. is awaited.
After rising toward mid-111s, the USD/JPY pair came under pressure in the last hour and erased the majority of its daily gains. As of writing, the pair was trading at 111.35, up only 10 pips on the day.
DXY drives the pair's price action
Following Wednesday's FOMC-inspired sharp drop, the USD/JPY pair traded in a very tight range on Thursday with the Thanksgiving holiday in the U.S. keeping the volume low. Although the market volatility didn't show a meaningful rise on Friday, the greenback continued to extend its losses against its peers. The US Dollar Index failed to hold above the 93 mark and fell to its lowest level since October 13 at 93.80. At the moment, the index is at 92.82, losing 0.25% on the day.
Later in the session, Markit is going to release its PMI data for the manufacturing and the service sector in the U.S. In case the data beat the investors' expectations, the greenback could take advantage of the data and try to correct its recent losses. Nonetheless, the pair is likely to close the third week in a row lower. Since the start of the month, the pair lost nearly 250 pips.
Technical outlook
The former support at 111.50, where the 100-DMA and 200-DMA levels are located, is now a critical resistance. Only a decisive break above that area could allow the pair to extend its corrective rise, encountering next resistance levels at 112 (psychological level) and 112.70 (Nov. 21 high). On the downside, supports could be seen at 111.05/00 (Nov. 23 low/Sep. 17 low) ahead of 110 (psychological level) and 109.30 (Sep. 12 low).
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 holds below 1.0750 ahead of key US data
EUR/USD trades in a tight range below 1.0750 in the European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
GBP/USD consolidates above 1.2500, eyes on US PCE data
GBP/USD fluctuates at around 1.2500 in the European session on Friday following the three-day rebound. The PCE inflation data for March will be watched closely by market participants later in the day.
Gold clings to modest daily gains at around $2,350
Gold stays in positive territory at around $2,350 after closing in positive territory on Thursday. The benchmark 10-year US Treasury bond yield edges lower ahead of US PCE Price Index data, allowing XAU/USD to stretch higher.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.