USD/JPY: Bears eye a break below 107.00 amid risk-off, ahead of US ISM

USD/JPY turns south amid risk-aversion, fresh dollar selling.
The spot clings onto 5-DMA support at 107.02.
US ISM Manufacturing PM to wrap up a light trading day.

Dhwani Mehta FXStreet

USD/JPY is holding onto the 5-DMA support just above 107.00 in early Europe, having faced rejection once again near 107.50. At the moment, the spot loses 0.10% to trade at 107.09.

The latest leg down in the US dollar across its main competitors is the main catalyst behind the drop in the major from a tepid bounce to near 107.20. The US dollar index stalled its bounce at 99.19 and now attacks 99.00. Sluggish US fundamentals combined with the dovish Fed keep the upside attempts in check.

The greenback popped in Asia after US-China trade tensions resurfaced and dampened the market mood. US President Donald Trump threatened retaliatory tariffs on China over the latter’s alleged mishandling of the coronavirus outbreak.

The pair spiked with the dollar and hit a daily high of 107.41. Growing deflationary fears in Japan, following downbeat Tokyo area CPI release, also collaborated with the uptick earlier today.

In the day ahead, traders will continue to track the dollar price-action and broad risk sentiment amid holiday-thinned markets and ahead of the key US Manufacturing PMI reports from both Markit and ISM.

Technically, on a breach of the 5-DMA support, the pair is likely to test the recent demand zone near 106.40. Alternatively, the resistance at 107.34/41 (10-DMA/ daily high) will be tested beyond which 20-DMA at 107.75 will be on buyers’ radar.

USD/JPY additional technical levels to consider

USD/JPY

Overview
Today last price	107.10
Today Daily Change	-0.06
Today Daily Change %	-0.06
Today daily open	107.17

Trends
Daily SMA20	107.82
Daily SMA50	108.04
Daily SMA100	108.77
Daily SMA200	108.3

Levels
Previous Daily High	107.5
Previous Daily Low	106.41
Previous Weekly High	108.04
Previous Weekly Low	107.28
Previous Monthly High	109.38
Previous Monthly Low	106.36
Daily Fibonacci 38.2%	107.08
Daily Fibonacci 61.8%	106.82
Daily Pivot Point S1	106.55
Daily Pivot Point S2	105.93
Daily Pivot Point S3	105.46
Daily Pivot Point R1	107.64
Daily Pivot Point R2	108.12
Daily Pivot Point R3	108.73

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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