USD/JPY drops to fresh 5-month low of 109.34

Omkar Godbole FXStreet Contributor

USD/JPY fell to 109.34; the lowest levels since November 17. The pair breached the key psychological support of 110.00 on Tuesday and fell below the monthly 50-MA of 109.59.

Stops hit, further losses likely on weak Chinese PPI

It is being reported that the latest move lower is due to stops being triggered on positional longs.

The sell-off could gather pace if the Chinese PPI cools more than expected. Moreover, it is the spike in the Chinese PPI in mid 2016 that set in motion the ‘great reflation trade’. Hence, a weak Chinese PPI could worsen the risk-off moves in the market and strengthen the demand for the Japanese Yen.

USD/JPY Technical Levels

The immediate support at 108.95 (monthly 10-MA), if breached, would open doors for a sell-off to 108.54 (200-DMA) and 108.34 (falling channel floor). On the higher side, breach of resistance at 109.60 (previous day’s low) would shift risk in favor of a re-test of 110.00 (psychological hurdle) and 110.35 (5-DMA).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Strongly Bearish	Neutral	Expanding
1H	Bearish	Oversold	Shrinking
4H	Bearish	Neutral	Expanding
1D	Bearish	Oversold	Shrinking
1W	Bearish	Neutral	Low
Updated Apr 11, 22:45 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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