USD/JPY dives to the lowest level since May 25, further below 109.00 mark

  • A combination of factors dragged USD/JPY lower for the third successive day.
  • The disappointing ADP report prompted aggressive selling around the USD.
  • The risk-off mood benefitted the safe-haven JPY and contributed to the slide.

The USD/JPY pair witnessed some aggressive selling during the early North American session and dived to the lowest level since May 26, around the 108.75 region in the last hour.

The pair struggled to preserve its intraday gains, instead met with some fresh supply near the 109.20-25 region and prolonged this week's negative move for the third consecutive session. The latest leg of a sudden fall over the past hour or so followed the disappointing release of the US ADP report, which weighed heavily on the US dollar.

The Automatic Data Processing (ADP) Research Institute reported that the US private-sector employers added 330K new jobs in July. This was well below consensus estimates pointing to a reading of 695K and June's downwardly revised reading of 680K. The data reinforced dovish Fed expectations, which was evident from a sharp fall in the US Treasury bond yields.

The USD remained depressed and failed to gain any respite from St. Louis Fed President James Bullard's comments, saying that inflation is going to be more persistent than some people expect. Bullard further added that inflation will remain elevated near 2.5% to 3% in 2022 and is not going to come down as fast as some people want.

Meanwhile, worries that the spread of the highly contagious Delta variant of the coronavirus disease could derail the global economic recovery took its toll on the global risk sentiment. The risk-off impulse – as depicted by a weaker tone around the equity markets – benefitted the safe-haven Japanese yen and exerted additional pressure on the USD/JPY pair.

Apart from this, possibilities of some technical selling below the 109.00 mark further contributed to the ongoing downward trajectory. This could also be seen as a fresh trigger for bearish traders and might have set the stage for a slide towards the 108.60-55 region en-route May swing lows, around the 108.35 area.

Wednesday's US economic docket also features the release of ISM Services PMI, which might influence the USD price dynamics and provide some impetus to the USD/JPY pair. Apart from this, the broader market risk sentiment and the US bond yields will also be looked upon for some short-term trading opportunities.

Technical levels to watch


Today last price 108.77
Today Daily Change -0.29
Today Daily Change % -0.27
Today daily open 109.06
Daily SMA20 109.96
Daily SMA50 110.1
Daily SMA100 109.6
Daily SMA200 107.19
Previous Daily High 109.34
Previous Daily Low 108.88
Previous Weekly High 110.58
Previous Weekly Low 109.36
Previous Monthly High 111.66
Previous Monthly Low 109.06
Daily Fibonacci 38.2% 109.06
Daily Fibonacci 61.8% 109.17
Daily Pivot Point S1 108.84
Daily Pivot Point S2 108.62
Daily Pivot Point S3 108.37
Daily Pivot Point R1 109.31
Daily Pivot Point R2 109.56
Daily Pivot Point R3 109.77



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD jumps to three-week highs near 1.1650 amid falling dollar, yields

EUR/USD is trading close to 1.1650, recovering ground to clinch three-week highs. The pair cheers risk-on mood-led decline in the US dollar. Treasury yields pullback, as poor US industrial data tempers hawkish Fed’s expectations. Focus on ECB and Fedspeak.


GBP/USD extends rally beyond 1.3800 on USD selloff

GBP/USD extended its rally in the European trading hours and reached its strongest level in a month above 1.3800. The broad-based selling pressure surrounding the greenback and the BoE rate hike expectations ahead of UK CPI data fuel the pair's upside.


XAU/USD targets $1791 on turnaround Tuesday

Gold price jumps 1% as the US dollar keeps losing ground across the board. Retreat in Treasury yields, risk-on mood aid the rebound in gold price. 

Gold News

Bitcoin open interest skyrockets as investors prepare for BTC price at $250,000

The open interest of Binance and CME Bitcoin futures hit a record high of $9.2 billion when combined. Bitcoin investment products saw an inflow of over $70 million last week, ahead of the ETF approval by the SEC.

Read more

Netflix (NFLX): Will Q3 earnings after the close be enough?

Netflix (NFLX) shares continued to perform strongly on Monday with results just around the corner. The stock has been very strong for some time, setting new all-time highs on the back of the global success of Squid Game.

Read more