USD/JPY Pair Being Traded Lower, But USD Shows Lucrative Gains
On Monday USD/JPY plunges to a new low hitting the 138.00 mark by the end of the day. This development occurred after thousands protested and demanded China end the lockdowns.
Despite the fact that as per the most recent data unemployment in Japan has diminished significantly and the country’s retail sales have increased, the JPY’s stability is still a question mark.
Nonetheless, USD/JPY has matched the new low of US bond yields. As the result, there has been significant demand in the market for the safe-haven Yen.
China’s Lockdown Woes Continue to Fluctuate the Market Sentiment
However, the biggest catalyst for the market’s ups and downs and its future growth has been the uncertainty regarding the Covid situation in China.
The strict restrictions imposed by the Chinese government are difficult for the market to get rid of.
Although most of the currency pairs recently have touched their all-time high since 1990. But USD/JPY failed to remain over their highest market 151.94 which was achieved in October.
Japan’s flawed monetary policy for FY 2023 posed extra pressure on the Yen, as the result, the JPY’s price declined considerably.
Technical Outlook of USD/JPY
In 2022 so far, the JPY’s price has declined over 7%, despite it having popular support at 140.00. But the poor performance in November has provided the opportunity for bears to predict a further decline in its prices.
Since the pressure on the Yen is continuously rising in comparison with the dollar, which has settled at the new support range of around 138.00.
The data revealed by the U.S. economic sources have argued that the current intense sell pressure on JPY can further decline its market support to around 135.16.
On Contrast, the USD Gains the High Ground
On the other hand, the USD started strong on Monday and further gained ground. USD has shown signs of great strength in the Asian markets as well.
Even though U.S. bond markets have shown some signs of sensitivity regarding China’s Covid-19 troubles. But China’s Covid woes seem to have no effect on the USD market performance.
DXY (USD) INDEX Shows That
On Monday, the DXY index surpassed the USD’s current surge of 107.99. However, in its resistance, the USD might surpass the new breakpoints of 109.29 – 109.54.
In case it failed to resist beyond 109.54 the chances are significantly high that the USD will stay stable at 107.99.
This first-day stability shows the US dollar is a good indicator for investors to tip on the dollar against the market uncertainty.
Following the reason market trend, it can be assumed that from an investor’s point of view, a higher return rate on the U.S. Dollar can be the real focus of the market once more.