USD/JPY drops below 10-DMA ahead of China data
|Broad based USD weakness pushed Dollar-Yen pair below 10-DMA level of 103.74 ahead of the data in China which is expected to show third quarter growth rate remained steady at 6.7% y/y.
Rejected 38.2% Fibo
Dollar bulls made their presence felt yesterday but lacked strength to ensure the pair extended gains above 104.17 (38.2% of Brexit day low and post Brexit high). This is despite the rise in the long duration treasury yields.
Moreover, the steepening of the yield curve since Friday is being read as a sign that markets see Fed moving rates slower than expected.
Furthermore, low US core inflation did not help matters either. The immediate focus is on China data.
USD/JPY Technical Levels
A break above 104.17 (38.2% of Brexit day low and post Brexit high) may not be sufficient as the real test would be whether the pair manages to hold above September high of 104.32. If it does, fresh demand could send the pair higher to 105.44 (23.6% of Brexit daylow – post Brexit high). On the lower side, strong support is seen at 103.14 (50% Fibo + 100-DMA), under which psychological support of 103.00 may not hold long, thus eventually making way for a further slide to 102.11 (50-DMA).
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.