USD/JPY challenging lows near 100.40 , Fedspeak, data on sight

Pablo Piovano FXStreet

The Japanese safe haven is picking up extra pace on Monday, sending USD/JPY to fresh lows in the 100.40 area.

USD/JPY focus on US data, Fedspeak

The renewed risk aversion sentiment has been supporting the demand for the safe haven JPY at the beginning of the week, with the pair snapping a 2-day positive streak and testing the area of session lows in the 100.50/40 band.

The ongoing risk-off trade plus scepticism around the ability of the BoJ to reach its inflation targets keep sustain the momentum around the Japanese currency, while earlier comments by Governor H.Kuroda failed to remove buying pressure from JPY.

Kuroda once again reiterated the readiness of the central bank to implement the necessary measures to spur domestic inflation, adding that deepening negative rates and lowering the long-term rate target will remain key easing measures.

Later in the NA session, US New Home Sales and the Dallas Fed manufacturing gauge will be in the limelight ahead of speeches by FOMC’s N.Kashkari (2017 voter, neutral?), D.Tarullo (voter, dovish) and R.Kaplan (2017 voter, neutral?).

Regarding positioning and according to the latest CFTC report, speculative net longs in JPY have climbed to 3-week tops during the week ended on September 20, while Open Interest decreased by nearly 30K contracts.

USD/JPY levels to consider

As of writing the pair is losing 0.50% at 100.46 and a breach of 100.07 (low Sep.22) would open the door to 99.53 (low Aug.16) and then 99.08 (low Jun.24). On the other hand, the next up barrier aligns at 101.24 (high Sep.23) followed by 102.07 (20-day sma) and then 103.36 (high Sep.14).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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