USD/JPY drops further under 105.50 as the DXY eyes 2020 lows
|- US dollar remains under pressure across the board.
- USD/JPY falls for the second day in a row, test support at 105.30.
The USD/JPY pair extended the decline on the back of a weaker US dollar across the board and tumbled to 105.31, the lowest level since Friday. As of writing it trades at 105.40, down 40 pips for the day, losing ground for the second day in a row.
The greenback is the worst performer in the currency market on Wednesday. It was unable to benefit from the latest round of economic data that showed an improvement in the service sector, above expectations. Also, a rebound in US yields did not offers support to the greenback.
The DXY is testing last week lows around 92.60. At the beginning of the week, the index peaked at 94.00 but since then it has been falling constantly as the bearish trend resumed.
Despite rising versus the US dollar, the yen is falling versus most of the other currencies amid risk appetite. The Dow Jones gains 1.15% while the S&P 500 rises 0.60%. Gold rose above $2,050 to fresh record highs.
Levels to watch
The USD/JPY was rejected several times during the current week from above 106.00 and it turned to the downside. The slide is now testing the support area around 105.30. A break lower would likely target 105.00, the next support stands at 104.90 and 104.60.
On the upside, the immediate resistance in USD/JPY might lie at 105.80 and above attention would turn to 106.00. A daily close above the last one, would clear the way to more gains for the dollar.
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