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European equities drop, push USD/JPY to 1-year low

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 20, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The USD/JPY pair ran into fresh offers around 116.80 and fell to one-year low of 116.00 levels as the European stock markets extended the risk aversion seen in Asia.

    Hovers around 116.10

    The spot now hovers around 116.10 levels. The pan-European Euro Stoxx 50 index dropped 3% in early trading and triggered a flight to safety. The resulting carry unwind increased demand for funding/safe haven currency JPY and pushed the USD/JPY lower.

    The pair took out the August 2015 low of 116.08 levels and fell to 116.01 levels. The pair was seen this low last on Jan 16 low. Ahead in the day, the spot is at the risk of falling further if the risk aversion worsens. The US monthly CPI data could also influence the pair.

    USD/JPY Technical Levels

    The immediate support is seen at 115.85 (Jan 16, 2015 low), under which the pair could extend the drop to 115.00 levels. On the other hand, a break above 116.51 (Jan 15 high) could see the pair recover to 117.00 levels.
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