USD/JPY sold-off aggressively to 113.75, risk-off back in vogue?
|- Back below 114 handle.
- US equity futures, USTs lead the fall.
- Powell like to be the next Fed Chair.
The USD/JPY pair ended its consolidation phase seen over the last hours and broke sharply to the downside amid renewed broad-based US dollar weakness in tandem with the US equity futures and Treasury yields.
USD/JPY: Wednesday’s low at 113.63 on sight?
The spot came under fresh selling pressure in Asia, mainly driven by a renewed risk-off wave that gripped the markets, boosting the demand for the safe-haven Yen and gold at the expense of the higher-yielding assets such as the US indices futures and Treasury yields. As a result, the US dollar too followed suit across its main competitors, with USD index knocked down to 94.31, down -0.38% on the day.
There is no major reason seen behind the steep drop in the spot, except for the fact that markets remain nervous ahead of the next Fed Chair announcement due later on Thursday, with Jerome Powell almost priced-in as the next Fed Chief.
Meanwhile, attention now turns towards US jobless claims data and Fedspeaks for fresh momentum on the prices, as the dust settles over the Fed decision, which had virtually no impact on the fx markets.
USD/JPY Levels to consider
Jim Langlands at FX Charts noted: “..on the topside, back above the session high would open the way to 114.45/50, an increasingly strong hurdle to overcome, but above which could see a test of the descending trend resistance, now at around 114.90. A break of 115.00 would then see little resistance until 115.20 and then 115.50. On the downside, support will be seen at 113.75 and at the session low at 113.60, below which could then head back to the 31 Oct low (112.95) although this seems unlikely today. If wrong, a sustained break of 113.00 would see us back in the previous 112/113 range, where 112.75 would be the first level of support ahead of 112.30.”
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.