USD/JPY Price Analysis: Drops to the lowest level since August 17, around 109.25 region

USD/JPY remained under heavy selling pressure for the second successive day on Wednesday.
COVID-19 woes benefitted the safe-haven JPY and exerted pressure amid renewed USD selling.
A convincing breakdown below a multi-week-old trading range support favours bearish traders.

Haresh Menghani FXStreet

The USD/JPY pair extended the previous day's post-US CPI downfall and witnessed heavy selling for the second successive day on Wednesday. The downward trajectory extended through the first half of the European session and dragged the pair to near one-month lows, around the 109.25 region in the last hour.

Worries about the fast-spreading Delta variant and a global economic slowdown benefitted the safe-haven Japanese yen. Apart from this, the emergence of some fresh selling around the US dollar exerted additional pressure on the USD/JPY pair. Bears further took cues from a modest downtick in the US Treasury bond yields.

The combination of factors dragged the USD/JPY pair below the 109.60-50 support zone, marked by the lower end of a four-week-old trading range. This, along with the fact that oscillators on the daily chart have just started drifting into the negative territory, has set the stage for a further depreciating move.

Hence, a subsequent slide towards the 107.00 round-figure mark, en-route August monthly swing lows, around the 108.70 region, remains a distinct possibility. Some follow-through selling will be seen as a fresh trigger for bearish traders and pave the way for a fall towards the next relevant support near the 108.35 region.

On the flip side, the trading range support breakpoint, around the 109.50-60 region, now seems to act as an immediate hurdle. Any further recovery move could attract fresh selling at higher levels and runs the risk of fizzling out quickly. This should cap the upside for the USD/JPY pair near the key 110.00 psychological mark.

USD/JPY 4-hour chart

Technical levels to watch

USD/JPY

Overview
Today last price	109.3
Today Daily Change	-0.39
Today Daily Change %	-0.36
Today daily open	109.69

Trends
Daily SMA20	109.89
Daily SMA50	109.93
Daily SMA100	109.83
Daily SMA200	108.02

Levels
Previous Daily High	110.16
Previous Daily Low	109.53
Previous Weekly High	110.45
Previous Weekly Low	109.62
Previous Monthly High	110.8
Previous Monthly Low	108.72
Daily Fibonacci 38.2%	109.77
Daily Fibonacci 61.8%	109.92
Daily Pivot Point S1	109.43
Daily Pivot Point S2	109.16
Daily Pivot Point S3	108.79
Daily Pivot Point R1	110.06
Daily Pivot Point R2	110.43
Daily Pivot Point R3	110.69

Author

Haresh Menghani

FXStreet

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

EUR/USD climbs to daily highs near 1.1820

EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.

GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Changing the game: International implications of recent tariff developments

The Supreme Court ruling on International Emergency Economic Powers Act (IEEPA) tariffs provides limited relief for the rest of the world, with weighted average tariff rates modestly lower.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.