USD/JPY: bearish trend resumes, fresh lows at sight
USD/JPY Current price: 107.60
- Yen appreciates on T-yields retracement from fresh 4-year highs.
- BOJ´s Kuroda reaffirmed the need of maintaining QE until inflation reaches 2.0%
The Japanese yen soared to a new 5-month high against the greenback, as dollar's demand receded and US Treasury yields retreated from fresh 4-year highs achieved ahead of Monday's opening. BOJ's Kuroda was on the wires, reiterating that the central bank must maintain its easing to reach their inflation goal of 2%, although that didn't prevent the yen from appreciating, as BOJ's action oppose to Kuroda's words lately. Japan released January Domestic Corporate Goods Price Index overnight which came in-line with market's expectations, failing to trigger action in the pair. Equities were down in Japan, now trading mixed in Europe, as Wall Street points to a negative opening, suggesting the yen may remain on demand. In the meantime, US Treasury yields keep easing from multi-year highs.
Technically, the pair is biased lower and poised to challenge 2017 low set last September at 107.31, as in the 4 hours chart, it fell further below its 100 and 200 SMAs, while technical indicators reached oversold readings, paring their declines but with no signs of changing course. The mentioned 107.31 level is the immediate support ahead of 106.80, where the pair has a couple of monthly highs from 2016.
Support levels: 107.30 106.80 106.50
Resistance levels: 107.70 108.00 108.35
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.
