USD/JPY Analysis: risk aversion keeps backing the yen

Valeria Bednarik FXStreet

USD/JPY Current price: 107.46

US macroeconomic calendar includes the Markit September preliminary PMI.
USD/JPY at risk of losing the 107.00 support, amid ruling risk-negative sentiment.

The USD/JPY pair has extended its negative momentum to 107.30, its lowest in almost two weeks. The market’s sentiment remains sour amid trade talk uncertainties, with representatives from China and the US offering mixed messages about progress. Demand for safety persists as equities trade in the red and government bond yields keep falling. Japan didn’t release relevant data, as the country celebrates a holiday this Monday, while the US macroeconomic calendar includes the September Markit preliminary estimates for the Manufacturing and Services PMI, seen at 50.3 and 51.5 respectively.

USD/JPY short-term technical outlook

The USD/JPY pair is trading just below the 23.6% retracement of its latest daily advance and around 107.45, the base of its latest range. In the 4 hours chart, the pair is trading below its 20 SMA, which gains downward strength, although it found support around a mild-bullish 100 SMA, at 107.30. Technical indicators in the mentioned chart have recovered from near oversold levels but remain within negative levels and below their intraday highs, indicating limited buying interest. Below the daily low, the pair would likely extend its decline toward the 107.00 figure, while it would need to advance above 107.60 to shrug off the negative stance and have a chance to recover toward 108.00.

Support levels: 107.30 107.00 106.60

Resistance levels: 107.60 108.00 108.35

View Live Chart for the USD/JPY

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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