USD/JPY analysis: safe-haven assets on demand

Valeria Bednarik FXStreet

USD/JPY Current price: 116.18

The USD/JPY pair rallied to 117.53 at the beginning of the day, but changed course mid European morning with the Japanese yen accelerating its advance in the US session, tracking the poor performance of American stocks and yields. The yield on the benchmark 10-year Treasuries fell 3 basis points at 2.38% percent, while the 30-year bond yield was 3 basis points lower at 2.97%, as fears about a "hard Brexit" and Chinese woes fueled demand for safe-haven assets. China's Central Bank has struggled with a plummeting Yuan last week, and on Saturday, the government said that its foreign exchange reserves fell to a near a six-year low. From a technical point of view, the USD/JPY looks increasingly bearish after the failed attempt to sustain gains beyond the 117.00 figure, and technical readings in the 4 hours chart support a new leg lower, as the price retreated quite fast from its 100 SMA, while the RSI indicator maintains its bearish slope around 43. In the same chart, the 200 SMA has provided a strong dynamic support last week, currently standing around 115.60, with a break below it opening doors for a downward extension towards 114.00 a long term Fibonacci support.

Support levels: 116.00 115.55 115.10

Resistance levels: 116.60 117.00 117.45

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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