USD/JPY drops to daily lows near 108.60 pressured by risk aversion

USD/JPY turned south ahead of the American session.
Major European equity indexes suffer heavy losses on Tuesday.
US Dollar Index edges lower toward 90.00 ahead of American session.

Eren Sengezer FXStreet

After spending the first half of the day in a relatively tight range below 109.00, the USD/JPY pair lost its traction and touched a session low of 108.59. As of writing, the pair was down 0.15% on a daily basis at 108.62.

Market mood sours

The negative shift witnessed in risk sentiment seems to be providing a boost to the safe-haven JPY on Tuesday. Major European equity indexes are down more than 2% on the day and the S&P 500 Futures are losing 0.8%, suggesting that the US stocks are likely to open deep in the negative territory.

On the other hand, the USD struggles to capitalize on risk-off flows and causes USD/JPY to stay on the back foot. The US Dollar Index, which posted small daily gains on Monday, is currently down 0.2% at 90.10.

However, the greenback could start finding demand in the second half of the day if the stock selloff picks up steam. Furthermore, the 10-year US Treasury bond yield is rising for the third straight day, confirming the view that the USD's losses could remain limited.

The JOLT Job Openings will be the only data featured in the US economic docket and the risk perception is likely to continue to impact USD/JPY's movements. On Tuesday, the Leading Economic Index and the Coincident Index from Japan will be looked upon for fresh impetus.

Technical levels to watch for

USD/JPY

Overview
Today last price	108.64
Today Daily Change	-0.18
Today Daily Change %	-0.17
Today daily open	108.82

Trends
Daily SMA20	108.69
Daily SMA50	108.94
Daily SMA100	106.68
Daily SMA200	105.89

Levels
Previous Daily High	109.06
Previous Daily Low	108.47
Previous Weekly High	109.7
Previous Weekly Low	108.34
Previous Monthly High	110.85
Previous Monthly Low	107.48
Daily Fibonacci 38.2%	108.83
Daily Fibonacci 61.8%	108.69
Daily Pivot Point S1	108.51
Daily Pivot Point S2	108.19
Daily Pivot Point S3	107.92
Daily Pivot Point R1	109.1
Daily Pivot Point R2	109.37
Daily Pivot Point R3	109.69

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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