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USD/JPY hits new session lows as stocks turn negative

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 15, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - USD/JPY failed to sustain above 118 handle and drifted lower over the last hours, tracking the weaker tone in the Asian indices as well in the black gold.

    USD/JPY comes down to test hourly 100-SMA

    Currently, the USD/JPY pair trades -0.22% at fresh session lows of 117.80, which intersects with the hourly 100-SMA placed at 117.79. The USD/JPY pair met fresh supply just ahead of 118 handle and fell sharply lower on the back of a renewed bout of risk-aversion hitting the markets after the Japanese stocks stalled the recovery and fell back in the red. The Nikkei resumes the previous sell-off and drops -0.40% to 17,170 levels.

    More so, falling oil prices worsened the risk-off conditions and lifted the safe-haven appeal of the yen, dragging USD/JPY lower. Markets also resorted to profit-taking on the USD longs after the recent strength, as nervousness prevails ahead of the release of a batch of significant US economic news.

    USD/JPY Technical levels to watch

    In terms of technicals, the immediate resistance is located at 118.12 (1h 200-SMA). A break above the last, the major could test 118.39/59 (Jan 13 High/ daily R1). While to the downside, the immediate support is located at 117.58/ 50 (daily S1/ psychological levels) below which 117.27/20 (Jan 14 & 12 Low) would be tested.
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