USD/JPY Forecast: En route to challenge 108.00
|USD/JPY Current Price: 108.35
- Risk-off took over the financial world in the American afternoon.
- Japan’s economy grew at the slowest pace in a year in Q3.
- USD/JPY bearish as long as below 108.50, Fibonacci resistance.
The USD/JPY pair has fallen to a fresh weekly low of 108.25 in the last trading session of the day, ending the day with substantial losses just a few pips above this last. The slump was triggered by a sudden run to safety mid-US afternoon, with government debt on demand and yields edging sharply lower.
Japan published at the beginning of the day the preliminary estimate of Q3 Gross Domestic Product, which resulted below the market’s estimate. According to the official report, the economy grew at the slowest pace in a year, at an annualised rate of 0.2%. In the three months to September, the economy grew 0.1%. Early Friday, the country will release September Industrial Production and Capacity Utilization.
USD/JPY short-term technical outlook
The USD/JPY is at risk of extending its decline as it has broken below the 61.8% retracement of its latest daily run, at 108.50. In the 4-hour chart, the pair is battling to hold above its 200 SMA, after plummeting below the 20 and 100 SMA. Technical indicators in the mentioned chart have reached fresh weekly lows, with the RSI currently consolidating around 27, rather reflecting the lack of volume at this time of the day than suggesting downside exhaustion.
Support levels: 108.20 107.75 107.30
Resistance levels: 108.50 108.90 109.25
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