USD/JPY drops to fresh one-month lows, closer to mid-104.00s

USD/JPY witnessed some heavy selling on Wednesday amid a broad-based USD weakness.
Technical selling below the 105.00 mark further aggravated the intraday bearish pressure.
September monthly swing lows, around the 104.00 is the next relevant target for bears.

Haresh Menghani FXStreet

The USD/JPY pair continued losing ground through the early North American session and tumbled to fresh one-month lows, around the 104.60-55 region in the last hour.

Following the overnight modest pullback from the 105.75 region, the pair came under intense selling pressure on Wednesday and was being pressured by the bearish sentiment surrounding the US dollar. Positive developments surrounding the next round of the US fiscal stimulus raised prospects for more government borrowing and sparked a selloff on the US bonds. The lack of demand for government debt was seen as one of the key factors that continued exerting downward pressure on the greenback.

It is worth recalling that hopes for a pre-election stimulus package revived after White House chief of staff Mark Meadows said on Tuesday that House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have made good progress on stimulus talks. Adding to this, the US President Donald Trump said that he was willing to accept a large aid bill, despite opposition from his own Republican party in the Senate. Investors, however, remained sceptic as negotiations are set to continue on Wednesday.

Apart from this, the prevalent cautious mood – as depicted by a flat opening in the US equity markets – extended some additional support to the safe-haven Japanese yen and further contributed to the USD/JPY pair sharp slide. The downward trajectory took along some short-term trading stops placed near the key 105.00 psychological mark. A subsequent fall below the previous monthly swing lows aggravated the intraday bearish pressure and dragged the USD/JPY pair to its lowest level since September 22nd.

It will now be interesting to see if the pair is able to find any support at lower levels or continues the bearish fall amid extremely oversold conditions on intraday charts. Nevertheless, the stage seems set for further weakness, possibly back towards challenging September monthly swing lows support near the 104.00 round-figure mark.

Technical levels to watch

USD/JPY

Overview
Today last price	104.59
Today Daily Change	-0.91
Today Daily Change %	-0.86
Today daily open	105.5

Trends
Daily SMA20	105.53
Daily SMA50	105.74
Daily SMA100	106.34
Daily SMA200	107.33

Levels
Previous Daily High	105.75
Previous Daily Low	105.35
Previous Weekly High	105.8
Previous Weekly Low	105.04
Previous Monthly High	106.55
Previous Monthly Low	104
Daily Fibonacci 38.2%	105.6
Daily Fibonacci 61.8%	105.5
Daily Pivot Point S1	105.31
Daily Pivot Point S2	105.13
Daily Pivot Point S3	104.91
Daily Pivot Point R1	105.71
Daily Pivot Point R2	105.93
Daily Pivot Point R3	106.11

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

Japanese Yen gains ground as traders await Fed rate decision

The USD/JPY pair loses ground to near 160.25 during the early European trading hours. Traders prefer to wait on the sidelines ahead of the US Federal Reserve interest rate decision under new Chair Kevin Warsh later on Wednesday.

AUD/USD holds steady above 0.7050; looks to Fed for fresh impetus

AUD/USD is consolidating above mid-0.7000s in the Asian session on Wednesday as traders await the outcome of a two-day FOMC meeting due later in the day. In the meantime, the optimism over an interim peace deal between the US and Iran keeps the US Dollar bulls on the defensive. This, along with the RBA's hawkish pause on Tuesday, acts as a tailwind for the pair.

Gold remains depressed but holds above $4,300 as traders seem hesitant ahead of Fed

Gold remains on the back foot heading into the European session, though it lacks follow-through selling and holds comfortably above the $4,300 mark. Traders now seem hesitant ahead of the highly anticipated FOMC policy decision, keeping the commodity below the weekly high.

DOGE near breakout, SHIB at its ceiling and PEPE leads meme coin recovery

Meme coins are approaching a key technical level, which could determine the next directional bias. Dogecoin struggles to overcome a major resistance level, and Shiba Inu recovery lost momentum near a crucial barrier. Meanwhile, Pepe extends its rally for a sixth straight day, raising the prospects of further upside if momentum persists.

The most important event will be the Fed meeting with Mr. Warsh now in charge

The most important event will be the Fed meeting on Wednesday, with Mr. Warsh now in charge. As more than one analyst points out, the case for holding rates the same is strengthened by the Iran deal and the prospect of the Strait re-opening, although nobody thinks Warsh can marshal enough doves to do a cut this time.

Why a hawkish RBA is no longer enough to lift the Australian Dollar

The Reserve Bank of Australia delivered more than what markets expected: a hawkish hold that should have supported the Aussie. But markets widely ignored it, focusing instead on slowing economic growth and proving that central bank messaging alone isn’t always enough to drive currencies.