USD/JPY fails to hold above 111.00, drops to session lows at 110.85
|- US dollar's reversal from 112.00 high extends below 111.00.
- The yen appreciates against a softer dollar in a risk-off session.
- USD/JPY is expected to consolidate between 110.30 and 111.70 – UOB.
The greenback has been trading sideways, both sides of the 111.00 level against the Japanese yen on Monday. The pair has opened the week on a soft tone with the investors awaiting the release of the US Non-Farm Payrolls report, due next Friday
The US dollar retreats further from YTD highs
The USD/JPY is heading lower for the third consecutive day, extending its reversal from 19-month highs right above 112.00 reached last week, to levels below 111.00, amid broad-based dollar weakness.
With the Chinese and South Korean markets closed on a bank holiday, the USD has been on the defensive. The dollar has suffered against a firmer yen, buoyed by the risk-off sentiment with investors wary about placing dollar bets ahead of Friday’s labour report, which is expected to clarify Federal Reserve’s next move.
Brighter than expected macroeconomic data, with US factory order improving beyond expectations in August, despite the bottleneck on global supply chains, has been overlooked by the market, more attentive to monetary policy issues.
USD/JPY: expected to consolidate below 112.00 – UOB
The US dollar might have finished its recent rally at 112.00, according to the UOB Group’s FX Analysis team, which sees the pair consolidating at current levels over the next weeks: “USD cracked the ‘strong support’ level at 111.10 (low of 110.89). The USD strength that started more than a week ago (see annotations in the chart below) has come to an end. The current movement is viewed as the early stages of a consolidation phase and USD is likely to trade between 110.30 and 111.70 for now.”
Technical levels to watch
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.