USD/JPY plummets to fresh 15-month lows, nearing 106.00 mark
| • Persistent USD weakness weighs heavily.
• Technical factors aggravate selling pressure.
The greenback extended its losing streak against the Japanese Yen, with the USD/JPY pair tumbling to fresh 15-month low during the early European session on Thursday.
The pair extended last week's sharp reversal slide from mid-110.00s and, so far, remained under heavy selling pressure for the fourth consecutive session. With investors looking past Wednesday's stronger US CPI print, resumption of the US Dollar selling was seen as one of the key factors weighing on the major.
Meanwhile, a slight improvement in investors' appetite for riskier assets, as depicted by positive trading sentiment around global equity markets also did little to prompt any selling around traditional safe-haven currencies - like the Japanese Yen and help ease the bearish pressure surrounding the major.
Currently placed around the 106.20 region, the lowest since November 2016, today's sharp downfall could also be attributed to some follow-through technical selling, especially after this week's bearish breakdown below the 108.00 handle.
Moving ahead, today's second-tier US economic releases - PPI print, regional manufacturing indices, usual initial weekly jobless claims and industrial manufacturing data, would now be looked upon for some immediate respite for the USD bulls.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes: “A corrective rally looks likely, with immediate upside capped around the downward sloping 1-hour 50-MA, currently seen at 107.35. Only a close above 108.25 (Jan. 26 low) would signal a short-term bottom is in place and may allow for a stronger gain towards 109.70-110.00 levels. Meanwhile, failure to capitalize on signs of bullish divergence on 4-hour chart (4-hour close below 106.30) could push the spot down to 105.72 (monthly 200-MA).”
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