USD/JPY Forecast: Breaking through the 110.00 threshold
|USD/JPY Current Price: 109.93
- Fears of recession exacerbated by the coronavirus spreading through Europe.
- The US 10-year Treasury yield fell to a record low of 1.32%, sets nearby.
- USD/JPY poised to test 109.65, break below it exposes monthly low at 108.31.
The USD/JPY pair fell to the 110.00 level during the American afternoon, trading not far above the level as the day comes to an end. Demand for safe-haven assets remained high amid recession fears. Disappointing macroeconomic figures coupled with US government bond yields falling to record lows and coronavirus-related headlines, showing that the outbreaks is extending its claws in Europe. The US 10-year Treasury yield fell to a record low of 1.32%, while US indexes plunged for a second consecutive day.
Japanese data was mixed, as the January Corporate Service Price Index beat expectations, up to 2.3% from 2.1% previously. The Leading Economic Index for December met the market’s expectations as it came in at 91.6, although the Coincident Index was downwardly revised to 94.1. US data, on the other hand, missed the market’s expectations, further hurting demand for the dollar. Japan won’t release macroeconomic data this Wednesday.
USD/JPY short-term technical outlook
The USD/JPY pair is down for a third consecutive day, and at risk of extending its slump. The 4-hour chart shows that the pair is below its 100 SMA for the first time since early February, while the 20 SMA turned sharply lower over 100 pips above the current level. Technical indicators maintain their bearish slopes near oversold readings. An extension below the 110.00 level favours a downward continuation toward 109.65, where the pair bottomed on February 18.
Support levels: 109.65 109.30 108.90
Resistance levels: 110.35 110.60 110.95
View Live Chart for the USD/JPY
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.