USD/JPY analysis: posed to retest 110.00
|USD/JPY Current price: 110.97
The USD/JPY pair sunk to 110.85 and settled a few pips above the level, undermined by plummeting US stocks and Treasury yields. The 10-year note benchmark fell down to 2.34%, its lowest in over a month, whist the 2-year note fell to 1.22%, as mixed US manufacturing indexes dented latest confidence in the US and fueled demand for bonds. The pair traded as high as 112.19, but was unable to settle above the 112.00 level, and quickly retreated, which left the dominant bearish trend firm in place. As for the intraday technical outlook, the 4 hour chart shows that the 100 and 200 SMAs gained bearish momentum above the current level, with the shortest detaching from the largest and currently around 112.20, whilst technical indicators continued pulling back from overbought readings and entered negative territory, now partially decelerating their declines, but still far from changing bias. The pair seems poised to retest its recent lows around 110.10, with a major Fibonacci support being at 109.90, the 50% retracement of the late 2016 monthly advance. The level should attract buyers if reached, but a break below it could see the pair entering in sell-off mode, and aim towards 108.50, mid November lows.
Support levels: 110.95 110.50 110.10
Resistance levels: 111.60 112.00 112.50
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