USD/JPY loses altitude, finds support around 114.00 handle

Omkar Godbole FXStreet Contributor

The Dollar-Yen pair is extending the five-day losing streak in Asia as the heightened fears of hard Brexit is weighing over the GBP/JPY cross.

The spot dropped to a session low of 113.97 before recovering slightly to 114.10 levels.

Trapped between two 23.6% Fib retracement levels

The pair looks trapped between 113.99 (23.6% fib retracement of 2011 low - 2015 high) and 114.54 (23.6% fib retracement of Nov 9 low - Dec 15 high).

The Sunday Times reported over the weekend that UK Theresa May is set to announce on Tuesday that the government is prepared for ‘Hard Brexit’. That led to a broad based sell-off in Sterling. The resulting drop in the GBP/JPY cross is hurting the USD/JPY pair.

Similar action could be seen once the European desks come online later today.

USD/JPY Technical Levels

A break below 113.99 (23.6% fib retracement) would open doors for an extension of the sell-off to 113.42 (Dec 7 low) and 113.00 (zero figure). On the other hand, a break above 114.54 (23.6% fib) would expose 115.07 (Jan 6 low), above which a major hurdle is seen at 115.45 (Jan 13 high).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Strongly Bearish	Neutral	High
1H	Bearish	Neutral	High
4H	Bearish	Neutral	Low
1D	Strongly Bearish	Oversold	High
1W	Bullish	Neutral	High
Updated Jan 16, 02:30 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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