- USD/JPY is taking up the bid again but remains heavy at the resistance line and below the key levels where supply is noted.
- USD/JPY is currently trading at 112.30 having recovered from a low of 111.95, en-route to the 21-hr SMA located at 112.86.
USD/JPY was slapped off its perch overnight as Europeans handover over a tired looking cross to the north American desks that took no risk in holding it vs the stock market collapsing yet again. The weakest line was the Asian markets that bled through to the European markets that were also contending with domestic political drams between the UK/EU deadlock and EC/Italian budget disagreements.
US stocks didn't like the reverberations from around the world
However, US stocks didn't like the reverberations from around the world with respect to the idea that the Fed could be on course to go beyond the neutral rate, (3%) following Wednesday's FOMC minutes. The pair slid heavily from there to a low of 111.95 with supply coming in around the Tenkan and Kijun lines at 112.79 and 112.87 - So it is now clear that the yen remains the number one haven currency - (USD/CHF rallies to trend highs).
USD/JPY levels
- Support levels: 112.25, 111.65, 111.30, 111.00.
- Resistance levels:112.60, 112.80, 113.00.
On a break below the 112 handle, Valeria Bednarik, chief analyst at FXStreet explained that a key dynamic support, the 100 DMA, is currently at 111.65, with a break below it opening doors for a slide down to the 111.00 figure during the upcoming sessions.
On the upside, a break of trendline resistance, 112.84 is on the map and the 8th Oct lows ahead of R3, 113.43, is located at 113.13. In a return of risk-off flows, the 111.80/83 guards the uptrend support at 111.55 as a key destination before 111.20. We then have deeper levels below the 110 handle at 109.77 as the August low.
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