USD/JPY analysis: yen gains on safe-haven demand
|USD/JPY Current price: 113.37
- Soft Japanese data prevent the yen from appreciating despite sour market sentiment
- US Treasury yields falling to fresh weekly lows.
The USD/JPY pair came under selling pressure in the US afternoon, dragged lower by a sharp reversal in US equities, weighed by tech and bank-related shares, these last weighed by a pullback in US Treasury yields after American inflation missed market's expectations. Data released at the beginning of the day showed that the economic growth shrunk in Japan according to Q3 GDP, down 0.3% in the three months to September. The annualized reading was even worse-than-expected, down 1.2% vs. an expected reading of -1.0%. Also, the Tertiary Industry Index for September fell 1.1% more than doubling the expected 0.4% decline, while Industrial Production in the same month declined by 0.4%, better than the forecasted -1.1%.
The USD/JPY fell to 113.29, a new weekly low trading a few pips above the level by the end of the US session. The 4 hours chart for the pair shows that it is still developing well above its 100 and 200 SMA, both around the 113.00 level and with the shortest advancing below the larger one as technical indicators resume their declines within negative levels, skewing the risk to the downside. Renewed selling interest below 113.20, now the immediate support should lead to a steeper decline, particularly if Asian shares follow the lead of their overseas counterparts.
Support levels: 113.20 112.85 112.50
Resistance level: 113.90 114.20 114.55
View Live Chart for the USD/JPY
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