USD/JPY: bearish momentum accelerates but 110.00 holding for now
|USD/JPY Current price: 110.34
- Risk-off in pause but still the main market motor.
- Equities collapsed in Asia following Friday's decline in overseas counterparts.
Risk aversion extended into the weekly opening, with the Japanese yen being the best performer, raising against all of its major rivals and with the USD/JPY pair falling to 110.10, its lowest since last June. Asian equities collapsed, following the lead of their overseas counterparts, which fell last Friday on the back of the Turkish Lira crisis. Safe-haven gold is also down, flirting with the 1,200.00 level and at fresh yearly lows. European markets opened sharply lower, affected by the negative risk sentiment, although risk-off paused after Turkey’s central bank announced that the local banks will be provided all the liquidity they need. Meanwhile, the greenback remains strong against high yielding assets, and equities remain close to fresh monthly lows.
The USD/JPY pair posted a modest bounce from the mentioned low, trading now at around 110.30, struggling with July's monthly low. The risk is skewed to the downside according to the 4 hours chart, as the price is well below a bearish 100 SMA, which extends its decline below the 200 SMA, both some 100 pips above the current level, while the RSI consolidates around 36. A break below the mentioned daily low should lead to a decline toward the 109.20/30 region, where the pair has several relevant lows from last June.
Support levels: 110.10 109.80 109.30
Resistance levels: 110.70 111.20 111.50
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