USD/JPY soars from nine months lows, rises back above 103.00 as Wall Street tumbles
|- USD/JPY consolidates recent bounce from multi-month lows despite risk aversion.
- Yen recovers versus G10 currencies on risk aversion.
The USD/JPY rose further during the American session and climbed to 103.25, 55 pips above the nine-month lows it reached earlier at 102.70. It rebounded sharply as equity prices in Wall Street reversed sharply to the downside.
The Dow Jones, the Nasdaq, and the S&P500 are falling by more than 2% after starting the year in positive ground. The sharp reversal in equities boosted the greenback across the board. The DXY erased losses and climbed back toward 90.00 after hitting under 89.40, the lowest level in more than two years. The VIX (fear index) jumped to the highest level in almost two weeks.
USD/JPY bearish but…
From a technical perspective, the reversal in USD/JPY could be positive for the greenback as it climbed back above 103.00. Still, the dollar needs to rise above 103.30/35 to gain support for a stronger recovery.
The long-term trend points to the downside. As long as USD/JPY keeps failing to consolidate under 103.00, the downside would remain limited.
Technical levels
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