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USD/JPY drops further to test 100-DMA

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 2, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The USD/JPY pair extends further to the south as we head towards mid-Asian trades, with the major failing to resist 121 handle after most major Asian indices turn negative.

    USD/JPY eyes NY low

    The demand for the Japanese yen was on the rise after sentiment gradually soured as the overnight slump in oil prices continued to rattle investors’ confidence and therefore, flight to safety remained the underlying theme in Asia. Japan Nikkei drops 0.30%, while the Australian ASX 200 loses -0.58%.

    Moreover, the yen received further boosts against the greenback after Japan’s newly appointed Japanese Economy Minister Ishihara squashed hopes for more BOJ easing and noted that BOJ will need more time to monitor impact of BOJ negative rate policy. At the time of writing, the major trades -0.22% lower near fresh session lows of 120.74 reached last minutes.

    With the downbeat US factories data behind, attention now shifts towards tomorrow’s BOJ Kuroda’s speech and the US ADP jobs data in absence of significant data release for today.

    USD/JPY Technical levels to watch

    In terms of technicals, the immediate resistance is located at 120.91/121 (1h 50-SMA/ round number). A break above the last, the major could test 121.45/50 (200-DMA/ round number). While to the downside, the immediate support is located at 120.58/52 (5-DMA/ daily S1) below which 120.18 (daily S2) would be tested.
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