USD/JPY drops to session lows near 113.20 on weakening USD
|- Consumer confidence data from the U.S. fails to meet market estimates.
- DXY refreshes weekly lows as it falls toward the 94 handle.
- US stocks extend their losses for the second day.
The USD/JPY pair came under pressure in the NA session and dropped to a fresh daily low at 113.22. At the moment, the pair is trading at 113.26, losing 0.2%, or 20 pips, on the day.
Dismal consumer sentiment data weighs on the greenback
The University of Michigan's Index of Consumer Sentiment eased to 97.8 in its first reading of November from 100.7 and missed the market expectation of 100.7. The report highlighted that although the expected Fed rate hikes seem to be the right preemptive action, the critical issue is whether income gains will be sufficient to outweigh rate hikes in home and vehicle purchase decisions. On a positive note, the details of the report showed that the labor market continued to improve with anticipated wage gains rising to their highest level in nearly ten years. Nevertheless, the US Dollar Index plummeted to 94.15 after the data and was last seen at 94.19, where it was down 0.25% on the day.
In the meantime, major equity indexes in the U.S. started the day lower amid tax plan jitters, pointing to a weak market sentiment, which ramps up the demand for the safe-haven JPY. At the moment, the Dow Jones Industrial Average and the S&P 500 are losing 0.25% and 0.35% respectively.
Despite this recent fall, however, the pair is likely to trade quietly in the remainder of the session as banks and the bond market closed in the United States in observance of Veterans Day.
Technical levels to consider
The immediate support for the pair aligns at 113.10 (Nov. 9 low) ahead of 112.75 (50-DMA) and 112.10 (Oct. 18 low). On the upside, resistances could be seen at 113.70 (daily high/20-DMA), 114.35 (Nov. 7 high) and 114 (psychological level).
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.