USD/JPY: Coronavirus bearish gap breaks below 109

USD/JPY drops in bearish gap as trader's worry for Coronavirus pandemic.
108.50 is first target on the downside ahead of the Fed this week.

Ross J Burland FXStreet

USD/JPY has dropped heavily in the open, breaking below the 109 handle to print a fresh low of 108.88 as traders prepare for a risk-off week when considering the implications of the Coronavirus.

In weekend news, heightened concerns were emanating from reports over the Coronavirus and a probable pandemic:

Chinese Nurse: “Pay attention to what I'm saying... 90,000 infected” in emotional plea for help

The World Health Organisation headquarters in Geneva will be one to watch for the week ahead and so too will the US bond market will be a good place to start monitoring of clues as to just how serious nervous investors are turning.

Eyes on the Fed

Meanwhile, the Federal Reserve interest rate decision is coming up and the consensus surrounding the Fed is one of a neutral stance with much of the hard work gone in last year and traders are looking for a message of stability in monetary policy for now.

"The funds rate will almost certainly be left unchanged. Tweaks to the FOMC statement are likely to be minor, with policy still described as "appropriate" but with officials also still in "monitor[ing]" mode, consistent with an easing bias. We expect a 5bp rise in the IOER rate to 1.60%, with the change downplayed as just a technical adjustment."

However, the risks of a slower recovery in global growth are coming back to the fore and the US bond markets are signalling that we can expect more risk-averse positioning as traders eye up the first target of 108.50 where support meets the 200-Day moving average.

USD/JPY levels

USD/JPY: The dollar sickens

USD/JPY

Overview
Today last price	109.29
Today Daily Change	0.00
Today Daily Change %	0.00
Today daily open	109.29

Trends
Daily SMA20	109.33
Daily SMA50	109.18
Daily SMA100	108.7
Daily SMA200	108.51

Levels
Previous Daily High	109.63
Previous Daily Low	109.17
Previous Weekly High	110.22
Previous Weekly Low	109.17
Previous Monthly High	109.8
Previous Monthly Low	108.43
Daily Fibonacci 38.2%	109.35
Daily Fibonacci 61.8%	109.45
Daily Pivot Point S1	109.1
Daily Pivot Point S2	108.91
Daily Pivot Point S3	108.64
Daily Pivot Point R1	109.55
Daily Pivot Point R2	109.82
Daily Pivot Point R3	110.01

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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