Forex Today: JPY attracts haven demand, EUR sell-off may have just begun
The anti-risk JPY picked up a strong bid in Asia, as risk aversion worsened on dismal China trade data.
Asian stocks opened on a weaker note, tracking the overnight losses on the Wall Street and extended the drop after China data showed the
exports in USD terms plunged 20.7 percent year-on-year in February - the biggest drop in three years - highlighting the worsening global
demand conditions. China's imports, an indicator of domestic demand, also fell 5.2 percent.
The growing evidence of a deeper slowdown in the world's second-largest economy will likely keep European stocks under pressure today.
Also, doubts over US-China trade deal are likely to keep risk assets under pressure. On Thursday, NewYork Times acknowledged the
progress in trade talks but said the negotiators haven’t yet decided when the tariffs would end and how both parties would ensure
compliance with the deal.
Therefore, the USD/JPY pair could test the psychological support of 111.00 in Europe, having breached the 200-day moving average (MA) support soon before press time.
Meanwhile, the shared currency could extend the 1 percent drop seen yesterday, the biggest single-day decline since Nov. 12 - more so, as yesterday's close at 1.1193 marked a downside break of the 3.5-month trading range of 1.12-1.15. The tide may change in favor for the EUR in the US session if both the US non-farm payrolls number and wage price inflation miss estimates by a big margin.
GBP/USD technicals are also leaning bearish. The pair closed yesterday below 1.3098 (low of the doji candle created on March 5), reviving the sell-off from the recent highs near 1.3350.
Kew news in Asia
- China's exports in USD terms fell by most in three years in February
- China trade surplus narrowed sharply in February as exports plunged 16%
- Senior China diplomat: Washington should avoid zero-sum thinking - Reuters
- Japan's Aso: Extra stimulus measures not needed
- Japan's Motegi: Fourth quarter data shows modest economic recovery
What's brewing in majors?
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
