USD/JPY analysis: risk aversion pushes it below 111.00

Valeria Bednarik FXStreet

USD/JPY Current price: 110.79

Equities and yields lower amid soft US data, uncertainty about US and China trade developments.
Japanese preliminary Leading Index for July foreseen at 103.6, below previous 104.7.

The USD/JPY pair fell to a fresh September low of 110.70 as sentiment took at a turn to the worse with equities falling worldwide and US Treasury yields also fell on the back of weaker-than-expected US employment data. Mounting concerns on upcoming tariffs from the US to Chinese goods weighed on investors. As for US yields, the yield on the benchmark 10-year Treasury note slipped to 2.87%. Japan will release during the upcoming Asian session the preliminary Leading Economic Index and Coincident Index, both for July. Yen's crosses, however, could enter wait-and-see mode ahead of the US Nonfarm Payroll report to be out later on Friday. The pair has turned bearish in the short-term, as in the 4 hours chart, it is trading below its 100 and 200 SMA, which continue lacking directional strength, running parallel around the 111.00 figure, while technical indicators maintain strong downward slopes, nearing oversold readings. Last week low at 110.68 is the immediate support, with a clear break below it on a disappointing US employment report favoring a downward extension to 109.80.

Support levels: 110.65 110.25 109.80

Resistance levels: 111.10 111.45 111.80

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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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