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USD/JPY heading towards key support near 119.80

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Oct 8, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - A renewed selling pressure hit the USD/JPY pair at the hourly 100-SMA and knocked-off the major the 120 handle, extending the bearish momentum for the third straight session.

    USD/JPY capped by hourly 100-SMA

    Currently, the USD/JPY pair trades -0.08% at 190.91, having tested weekly lows near 119.85 levels. The yen appears to have picked-up pace versus the US dollar and keeps pushing USD/JPY towards the S3 and Oct 7 lows placed at 119.76/75 levels.

    The Japanese currency remains bid against the buck mainly on the back of falling Japanese stocks, which triggers fresh demand for safety bets such as the yen. Nikkei drops -0.64 to 18,204.

    Further, USD/JPY remains little affected by the poor datasets from Japan released earlier on the day. Core machine orders dropped 3.5%, below expectations for an increase of 3.5%. While the trade balance came in at a deficit of 326.1 billion yen, following the 108.0 billion yen shortfall in the previous month.

    Attention now turns to the key event – the FOMC minutes for further direction while the weekly jobless claims will be also closely eyed.

    USD/JPY Technical levels to consider

    To the upside, the next resistance is located at 120.11 (Hourly 100-SMA, Today’s High & R3 on H1) beyond which 120.56-57 (Oct 5 & 6 Highs) could be tested. A breach of the last, the pair could climb further towards the 50-DMA located at 120.85. To the downside immediate support might be located at 119.75/76 (Oct 7 Low & S3 on H1), below which 119.22-21 (Sept 29 & 24 Lows) could be exposed. A breach of the last, the pair could drop to 118.83 (Sept 8 Low) levels.
    For more information, read our latest forex news.

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