USD/JPY analysis: yearly low at 108.12 a probable bearish target

USD/JPY Current price: 108.74

The USD/JPY pair fell to a fresh weekly low of 108.64, holding a few pips above the level by the end of the US session as risk aversion fueled demand for the safe-haven yen. The pair was aiming to recover some ground mid European session, but changed course abruptly after North Korean ambassador before the UN said that the latest nuclear test are a "gift package" for the US. The headline came right after news showing that US ambassador said before the UN that North Korea is "begging for war," and that sanctions so far have been useless to stop N. Korea. US Treasury yields plunged to their lowest for the year, with the 10-year note benchmark at 2.07% in the American afternoon, down from previous 2.16%. Stocks are also in the red with the DJIA shedding over 250 points.   The pair is clearly bearish, poised to extend its decline towards 108.12, the yearly low as the first bearish target to consider. In the 4 hours chart, the price has accelerated well below its 100 and 200 SMAs, whilst technical indicators keep heading lower near oversold readings, supporting further declines on a break below 108.60, the immediate support.

Support levels: 108.60 108.10 107.70

Resistance levels: 109.00 109.35 109.80

View Live Chart for the USD/JPY

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