USD/JPY struggles near 2-month lows, just above 108.00 handle
|- USD/JPY witnessed some heavy selling for the fifth straight session.
- Escalating geopolitical tensions boosted the JPY’s safe-haven status.
- Friday’s US ISM PMI print and FOMC minutes eyed for a fresh impetus.
The USD/JPY pair maintained its heavily offered tone through the Asian session on Friday, albeit now seems to have found some support near the 108.00 handle.
The pair added to its heavy losses recorded since the beginning of this week and witnessed some follow-through selling for the fifth consecutive session on Friday. The pair tumbled to over two-month lows in reaction to the US airstrikes on Baghdad airport, which killed a senior Iranian military official and boosted the Japanese yen's perceived safe-haven status.
USD/JPY weighed down by the global flight to safety
Heightened geopolitical tensions triggered a fresh wave of global risk-aversion trade and the same was evident from a selloff across equity markets. This was further reinforced by a negative tone surrounding the US Treasury bond yields, which kept the US dollar bulls on the defensive and further collaborated to the pair's downfall to its lowest level since early November.
However, extremely oversold conditions on hourly charts held investors from placing fresh bearish bets and turned out to be the only factor that helped limit further downside, at least for the time being. Moving ahead, market participants now look forward to the release of US ISM Manufacturing PMI, which will be followed by the latest FOMC meeting minutes for a fresh impetus.
Technical levels to watch
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