USD/JPY drops to new weekly low near 110.30 on broad-based USD weakness

US Pres. Trump criticizes Powell's policy decisions.
US Dollar Index eases below the 96 mark.
10-year T-bond yield loses more than 1.5%.

Eren Sengezer FXStreet

The USD/JPY pair extended its losses in the NA trading hours after the greenback continued to weaken on latest remarks from US President Trump. At the moment, the pair is trading at its lowest level in a week near 110.30, losing 0.2% on the day.

Speaking to wealthy Republicans at an event on Friday, President Trump reportedly complained about the FOMC's decisions to hike the rates and said that he expected Jerome Powell to be "a cheap-money Fed chairman." The US Dollar Index slumped to a new 10-day low at 95.94 on these comments and has been having a tough time retracing its losses since then. At the moment, the index is at 95.96, down 0.18% on the day.

Furthermore, speaking at a Chamber of Commerce luncheon on Monday, Atlanta Fed President Raphael Bostic said that the economy didn't need the monetary stimulus it once did but the Fed was worried about the flattening yield curve.

In the meantime, the sharp fall witnessed in the US T-bond yields on Monday weighs on the pair as well. At the moment, the 10-year reference is losing 1.6% on the day at 2.828%.

Technical levels to consider

With a decisive break below 110 (psychological level), the pair could extend its losses toward 109.30 (200-DMA) and 108.70 (Jun. 1 low). On the upside, resistances are located at 110.50 (100-DMA), 111.05/10 (20-DMA/50-DMA) and 111.45 (Aug. 8 low).

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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