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USD/JPY drops below 112.00 on heightened risk-off in Europe

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 11, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    The demand for JPY increased further, pushing the USD/JPY pair below 112.00 levels as the risk-off in European equities triggered a flight to safety.

    Tests Fibo support

    The spot dropped to 111.55 (127.2% fibo expansion of May 2015 high – Aug 2015 low – Nov 2015 high) before recovering slightly to 111.80 levels. Euro Stoxx 50 index fell 2% leading to a further rise in demand for the safe haven assets- JPY, Gold and Treasuries.

    The sell-off could continue if the risk-off hits the Wall Street. The US weekly jobless claims data could receive little attention if the risk-off worsens.

    USD/JPY Technical Levels

    The immediate resistance is seen at 112.50, which if taken out shall open doors for a recovery to 113.12 (previous day’s low). On the other hand, a break below 111.55 (127.2% fibo expansion of May 2015 high – Aug 2015 low – Nov 20315 high) would shift risk in favor of a further drop to 111.00 levels.
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