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Fresh selling in Nikkei drives USD/JPY to 113.00

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 29, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    The USD/JPY pair came under renewed selling pressure over the last hour and fell further into losses, now launching an attack at 113 handle.

    USD/JPY trades below 5-DMA

    The bearish pressure around the USD/JPY keeps intensifying as we progress towards early Europe, on the back of worsening risk sentiment as the Japanese stocks shave-off gains and turn negative. The benchmark, Nikkei 225 index drops -0.26% at 16,161 versus +0.70% previous. At the time of writing, USD/JPY tests 113 handle, down -0.82% on the day.

    The yen continues its rise versus the US currency as investors seek safe-havens amid market turmoil. The slump in the Chinese equity markets spooked markets once again and dragged its Asian counterparts lower. The Shanghai Composite is down -3.40%, while the CSI300 sinks -3.02%.

    Calendar-wise, we had weak Japanese retail sales release earlier today, which disappointed markets. While in the upcoming session, the US Chicago PMI and pending home sales will be reported and may have major impact on the USD moves.

    USD/JPY Technical levels to watch


    In terms of technicals, the immediate resistance is located at 114 (daily high/ round number). A break above the last, the major could test 114.33 (Feb 18 High). While to the downside, the immediate support is seen at 112.95/94 (1h 50 & 200-SMA) and below that at 112.50/48 (psychological levels/ 1h 100-SMA).
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