USD/JPY tumbles toward 109.00 on trade war fears, US data
|- Japanese yen gains momentum on weak market sentiment.
- Greenback extends losses on US data and worries about trade negotiations.
The USD/JPY pair is falling sharply on Monday, having the worst performance in over a month. Earlier today the pair reached the highest intarday level in six month but failed to break firmly above 109.70 and lost strength. Then new announcement from US President Trump and US data favored further losses in the pair that hit 5-day lows at 109.07.
Data, Trump and Ross... also against US dollar
The greenback is falling across the board and even against commodity currencies. On the contrary the yen is among the top performers supported by risk aversion. Equity prices in Wall Street are falling sharply. The Dow Jones is down 0.75% and the Nasdaq 1.35%.
Data from the US manufacturing sector came in below expectations and weight on the US dollar that was already weak following US President Trump’s announcement. He increased tariffs to steel and aluminum from Brazil and Argentina. The new tariffs elevated markets concerns about a global trade war. More recently US Commerce Secretary Wilbur Ross said Trump will increase tariffs to Chinese goods if they don’t reach a deal.
Levels to watch
The sharp reversal from levels topping 109.70 could signal USD/JPY has peaked. The pair is about to test the 109.00 area; below the next support might be seen at 108.90 (20-day moving average) followed by 108.75. On the upside, 109.30 has become the immediate resistance followed by 109.55.
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