USD/JPY Current price: 106.11

  • US yield-curve inverts, risk aversion takes over.
  • Japanese data surprised to the upside, with Machinery Orders bouncing sharply in June.
  • USD/JPY poised to resume its decline, confirmation with a break below 106.00.

The USD/JPY pair has begun correcting lower during Asian trading hours following an approach to the 107.00 figure. Initially, the decline seemed corrective, although it turned into a return of bears during European trading hours, as the US 10y-2y- bond yields’ spread finally inverted, triggering concerns of a US recession. The pair is now approaching the 106.00 figure, with the dollar again under selling pressure and equities in free-fall.

Japanese data released earlier today surprised to the upside, as Machinery Orders rose in June by 13.9% largely surpassing the market’s forecast of a 1.3% decline. When compared to a year earlier, orders were up by 12.5%. There are no relevant data scheduled in the US this Wednesday.

 USD/JPY  short-term technical outlook

The 4 hours chart for the USD/JPY pair shows that the price is hovering mid-way between its 20 SMA, offering a dynamic support at around 105.70 and a bearish 100 SMA, this last at 107.25. Technical indicators are retreating from overbought levels, so far holding in positive territory. Given that risk aversion returned, the risk is skewed to the downside with a break below 106.00 probably exacerbating selling interest.

Support levels: 106.00 105.70 105.30

Resistance levels: 106.40 106.80 107.10

View Live Chart for the USD/JPY

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.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD holding onto gains amid trade wars, ahead of German IFO

EUR/USD is trading around 1.1150, consolidating its gains after the escalation in US-Sino trade wars sent US yields and the greenback lower. German IFO Business Climate is next.

EUR/USD News

GBP/USD consolidates amid Brexit uncertainty

GBP/USD is trading below 1.2300, consolidating its gains. The UK and the EU have been blaming each other for a potential no-deal Brexit. US-Sino tensions are in play as well.

GBP/USD News

USD/JPY recovers farther from multi-year lows on Trump’s positive trade-related comments

The incoming positive trade-related comments dented the JPY’s safe-haven demand. Improving global risk sentiment helped the pair to recover around 150-pips intraday. Investors now look forward to the US durable goods orders data for a fresh impetus.

USD/JPY News

Forex Today: Trade wars paint markets in red, Brexit looks worse, and central banks are limited

Here is what you need to know on Monday, August 26th: The US-Sino trade war is painting global markets in the red. The US dollar is losing some ground to major currencies as yields plunge, while it gains against commodity currencies. Gold is rising and oil is falling.

Read more

Gold: Risk-off rally stalls after US, China aim to calm trade war fears

Having surged to the fresh high since April 2013, Gold declines to the intra-day low of $1,538.50, before taking rounds to $1541.60, by the press time of early Monday. China shows readiness to have a calm discussion with the US.

Gold News

Majors

Cryptocurrencies

Signatures