USD/JPY analysis: bearish breakout set to extend to 109.90
|USD/JPY Current price: 110.82
The USD/JPY pair trades at its lowest for this 2017 and not far from a daily low of 110.74, as risk aversion fueled demand for the safe-haven currency, exacerbated by the technical breakout of the 111.60 level earlier in the day. The pair plummeted at the beginning of the day after Wall Street's sharp decline weighed on Asian equities, further weighed through the day by the continued weakness in US Treasury yields, with the 10-year note benchmark falling down 2.39% after closing on Tuesday at 2.44%. The decline paused during the Asian session, as the Japanese trade surplus surged to a multi-year high of ¥813.4 billion in February. Exports in the same month surged by 11.3%, beating expectations, albeit imports increased by just 1.2%, from previous 8.5% advance. The technical outlook is clearly bearish according to the 4 hours chart, with technical indicators heading sharply lower within extreme oversold territory, whilst the price has extended further below its 100 and 200 SMAs. A break below 110.70, the immediate support, should lead to a continued decline towards 109.90, the 50% retracement of the November/December rally.
Support levels: 110.70 110.30 109.90
Resistance levels: 111.15 111.60 112.00
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