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USD/JPY: Selling pressure intensifies, looks to test 109.00

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Apr 7, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    The Japanese currency continues to smash its American counterpart in the mid-Asian trades, with USD/JPY now sinking lower to fresh multi-month lows.

    USD/JPY drops further from 119.50

    The dollar-yen pair came under fresh selling pressure over the last hours after the yen regained momentum and climbed further, as the steep losses in the Chinese and Japanese markets triggered a renewed spell of risk-aversion. At the time of writing, USD/JPY slumps to the lowest levels since Oct 2014 at 119.12, while the Nikkei 225 loses -0.40% and the Shanghai Composite index drops -0.90%.

    Further, the yen continues to strengthen across the board as a number of Japanese officials are hitting the wires and reiterate that intervention in the fx markets to curb a strong yen is unlikely. The latest comments come from Japan’s top fx diplomat, citing that the government is unlikely to intervene in the markets to stem yen rises.

    Meanwhile, markets continue to monitor development surrounding the yen markets, especially headlines from Japan office, while the sentiment around the oil and stocks market will continue to drive the major ahead of the US jobless claims.

    USD/JPY Technical levels to watch

    In terms of technicals, the immediate resistance is located at 109.90/110 (daily pivot/ round n umber). A break above the last, the major could test 110.44/46 (5-DMA/ daily R1). While to the downside, the immediate support is seen at 109 (Oct levels) and below that at 108.60 (daily S2).
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