USD/JPY continues to erase Tuesday's gains, drops below 109.50 ahead of US data

  • Risk aversion returns to the market on Wednesday.
  • US Dollar Index posts modest gains for the third straight day.
  • Coming up: Reatil sales, Industrial production and capacity utilization data from the U.S.

After testing the 109 handle on Monday, the USD/JPY pair staged a decisive rebound yesterday and gained more than 50 pips on the day. However, with the market sentiment turning sour, once again, on Wednesday, the pair lost its traction and turned south. As of writing, the pair was down 0.2% on a daily basis at 109.35.

Disappointing retail sales and industrial production data from China reminded investors of the slowdown in the world second-largest economy and ramped up the demand for traditional safe-havens such as the JPY. Additionally, responding to reports of U.S. President Donald Trump planning to sign an executive order restricting foreign telecom companies, Chinese Foreign Ministry Spokesman Geng Shuang urged the U.S. to create a fair environment for Chinese companies and added that China will respond with countermeasures to the U.S. bullying tactics, suggesting that the trade dispute is unlikely to be resolved in the near term.

Reflecting the risk-off atmosphere, the 10-year US T-bond yield is losing nearly 1.7% on the day to further weigh on the USD/JPY pair. Furthermore, the S&P 500 Futures is losing 0.3% to hint a negative opening in Wall Street today.

In the second half of the day, the U.S. Census Bureau's retail sales figures and industrial production and capacity utilization data published by the Federal Reserve will be looked upon for fresh impetus. 

Technical levels to consider


Today last price 109.36
Today Daily Change -0.26
Today Daily Change % -0.24
Today daily open 109.62
Daily SMA20 111.1
Daily SMA50 111.18
Daily SMA100 110.53
Daily SMA200 111.45
Previous Daily High 109.77
Previous Daily Low 109.14
Previous Weekly High 110.96
Previous Weekly Low 109.46
Previous Monthly High 112.4
Previous Monthly Low 110.8
Daily Fibonacci 38.2% 109.53
Daily Fibonacci 61.8% 109.38
Daily Pivot Point S1 109.25
Daily Pivot Point S2 108.88
Daily Pivot Point S3 108.62
Daily Pivot Point R1 109.88
Daily Pivot Point R2 110.14
Daily Pivot Point R3 110.51



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