USD/JPY: run to safety boosts the JPY
|USD/JPY Current price: 111.74
- The USD is out of market favor on a risk-averse environment, sharply down across the board.
- Asian and European indexes under strong selling pressure on weekend political headlines.
The USD/JPY pair trades at around 111.74 after falling to 111.62, its lowest since September 13 and seems poised to extend its decline, weighed by risk sentiment. The Japanese currency gains on a run to safety amid political jitters in Europe, which led Asian equities dip into the red and maintains European ones are also down, although to a lesser extent. US Treasury yields, meanwhile, trade little changed from Friday's close, with the benchmark yield for the 10-year Treasury note currently at 3.15%.
Japanese data released at the beginning of the day failed to impress as Industrial Production rose 0.2% MoM in August, after a 5.3% increase in July, while it came in up by 0.2% when compared to a year earlier. Capacity Utilization in the same month rose a healthy 2.2%, up from -0.6% in the previous month. Market players are now waiting for US September Retail Sales figures, foreseen up after a modest increase in August.
The pair is currently extending its decline as the greenback is under pressure across the board, out of market's favor despite the ongoing risk aversion, and seems unlikely that it could regain ground, although the decline in the USD/JPY pair can be interrupted by an upward surprise in US Retail Sales. Technically, however, the pair is firmly bearish, now accelerating its decline below the 100 and 200 SMA, as technical indicators head south within negative territory, the Momentum after failing to surpass its mid-line and the RSI nearing oversold readings. The 100 DMA stands a few pips below the daily low, around 111.50, providing a strong dynamic support that once broken, should lead to a steeper decline during the upcoming sessions.
Support levels: 111.50 111.20 110.85
Resistance levels: 111.90 112.25 112.60
View Live Chart for the USD/JPY
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