USD/JPY closes in on 106.00 supported by risk flows

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  • USD / JPY rose to its highest level in five days on Monday.
  • Major Wall Street indices are holding on to strong daily gains.
  • The US Dollar Index appears to close in the red at the mid-93.00.


The USD / JPY pair gained traction on Monday and rose to its highest level in five days at 105.79. With market action turning subdued in the US session, the pair appears to have entered a consolidation phase and was last seen gaining 0.38% daily at 105.72.

Risk flows hurt the JPY on Monday

The risky environment in the market amid declining health concerns from US President Donald Trump and the release of upbeat macroeconomic data boosted global stocks and made it difficult for the safe-haven JPY to find demand at the beginning of the week.

Data released by IHS Markit and ISM showed that economic activity in the US service sector continued to expand at a strong pace in September. In addition, Eurostat reported that retail sales in the euro area increased by 4.4% in August to exceed market expectations of 2.4%.

Reflecting the positive sentiment, the major Wall Street indices started the day strong and allowed the USD / JPY to maintain its bullish momentum. At the moment, the S&P 500 and the Dow Jones Industrial Average are up about 1.4% on the day.

On the other hand, the dollar remains on the defensive on Monday and limits the rise of the pair for now. At the time of writing, the US Dollar Index is down 0.38% on the day at 93.45 and remains on track to close in negative territory for the fifth time in the past six trading days.

About the author

Nafees Saifi // entrepreneur, author, trainer, and stocks and FX trader. 
Nafees Saifi is a professional FX trader from, India. Nafees has extensive experience trading commodities, bonds, and equity futures in the Asian, European, and US markets. Nafees holds a Bachelor of Finance and Economics degree and is focused heavily on Investment Finance and Quantitative Analysis.

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