USD/JPY drops below 114.00, breaches key trend line support

Omkar Godbole FXStreet Contributor

The bid tone around Yen strengthened in Asia, pushing the USD/JPY pair below 114.00 levels. The pair has also breached a critical rising trend line support on the 4-hour chart.

Rejected at 4-hour 200-MA

The spot was rejected at the 4-hour 200-MA level of 114.30 earlier today. This was preceded by a failure at the 50-DMA level of 115.00 in the North American session.

The pair appears to be tracking long duration treasury yields, which currently trade at least two basis points lower on the day. Moreover, the losses in the treasury yields and the US dollar contradict the strong US CPI and retail sales data released overnight.

Analysts say it was the sharp downward revision of the GDP forecast by the Atlanta Fed and disappointing comments on the economy from Yellen that played a spoil sport.

The focus today is on the US initial jobless claims and housing starts, building permits release.

USD/JPY Technical Levels

The spot was last seen trading around the 5-DMA level of 113.83. Acceptance below the same could yield a drop to 113.24 (Tuesday’s low) and 113.08 (10-DMA), under which the losses could be extended to 112.52 (Jan 24 low). On the other hand, a breach of resistance at 113.95 (rising trend line resistance) would shift risk in favor of a re-test of 114.30 (session high) and 114.50 (resistance on 4-hour).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Neutral	Low
1H	Bullish	Neutral	High
4H	Strongly Bearish	Neutral	Expanding
1D	Bearish	Neutral	Expanding
1W	Bullish	Oversold	Shrinking
Updated Feb 14, 13:45 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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