USD/JPY printing fresh corrective lows, its downside one to watch for start of 2020


  • USD/JPY slips to session lows, to a 38.2%Fib retracement of Dec range. 
  • US data impacting the DXY while US markets brush aside politics, for the time being. 

USD/JPY has skidded to fresh lows for the week, printing down at 109.21 having slipped from a high of 109.68, on the day so far. There are little rhyme nor reasons for the holiday period moves at times, other than that there is less liquidity – although today's US data was a disappointment and a likely factor in the downside for the US dollar. 

However, it begs the question as to how the S&P 500 was able to pierce the 3200 level for the first time in history today and how the three US benchmarks push on for new session highs. It would appear that the euphoria in US stocks shines-on over the so-called, 'phase-one' deal and that markets have shrugged off the US President's impeachment.

The markets consider that there is virtually no chance the Senate would convict Mr Trump. The Republican majority could even end the trial early without witness testimony. Democrats and Republicans must now agree how the Senate trial will be held. Meanwhile, Democratic House Speaker Nancy Pelosi has suggested the House could delay sending the articles of impeachment to the Senate and that could put off the trial for an indefinite period, denying Mr Trump his expected acquittal.

US data disappointing into year-end ahead of NFP

One factor that seemed to have contributed to a bleed out in USD/JPY at the start of the day came from the Philly Fed December data miss which arrived at just 0.3% vs 8.0% expected and the prior +10.4%. The US stock markets may no longer be the best guide for FX considering how inflated they are on money that is de-coupled from economic drivers. Elsewhere, US initial jobless claims were at 234k vs 225k estimates which is an additional bearish factor for the US dollar considering how close we are now to the December Nonfarm Payrolls which will be released in a couple of week's time. 

DXY in broader upside correction 

All-in, however, the US dollar is, in fact, making a broader recovery than today's price action is challenging.

The DXY has been in recovery from low 96.60s until today's highs of 97.49 which puts the moves in USD/JPY into context. The US dollar is holding above the 21-hour moving average in the DXY and is supported by the 50-hour moving average and a confluence of the 38.2% Fibonacci of the December range which reinforces the upside bias on a technical basis and a seasonal basis when considering the end of year repatriation flows into the US dollar – there are still plenty of trading days left for the year. 

Yen could lead the way in 2020

However, one could argue that the US political cycle has been turning less supportive for risk sentiment through 2020 and noting the recent turn of sentiment in Brexit, there are risks rising again, especially given an underwhelming follow through to a phase one deal – it could be that the yen leads the stocks lower next time around. 

USD/JPY levels

On the downside, there is support seen between the 200 and 55-day moving averages and the current December low at 108.76/43. "Only unexpected failure at 107.89 would probably trigger losses to the 106.48 October low. Failure at 106.48 would target the 106.00 mark," analysts a Commerzbank argued. 

USD/JPY

Overview
Today last price 109.21
Today Daily Change -0.35
Today Daily Change % -0.32
Today daily open 109.56
 
Trends
Daily SMA20 109.04
Daily SMA50 108.82
Daily SMA100 107.86
Daily SMA200 108.77
 
Levels
Previous Daily High 109.63
Previous Daily Low 109.4
Previous Weekly High 109.71
Previous Weekly Low 108.43
Previous Monthly High 109.67
Previous Monthly Low 107.89
Daily Fibonacci 38.2% 109.54
Daily Fibonacci 61.8% 109.49
Daily Pivot Point S1 109.43
Daily Pivot Point S2 109.3
Daily Pivot Point S3 109.2
Daily Pivot Point R1 109.66
Daily Pivot Point R2 109.76
Daily Pivot Point R3 109.89

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD regains traction, recovers above 1.0700

EUR/USD regains traction, recovers above 1.0700

EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.

EUR/USD News

GBP/USD returns to 1.2500 area in volatile session

GBP/USD returns to 1.2500 area in volatile session

GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.

GBP/USD News

Gold holds around $2,330 after dismal US data

Gold holds around $2,330 after dismal US data

Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.

Gold News

XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger

XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger

Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP. 

Read more

After the US close, it’s the Tokyo CPI

After the US close, it’s the Tokyo CPI

After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.

Read more

Forex MAJORS

Cryptocurrencies

Signatures