USD/JPY slides below 112.50 level, hits two-week lows

Haresh Menghani FXStreet

The USD/JPY pair traded with bearish bias for the third consecutive session and has now dropped to two-week low level near 112.40 region.

The pair remained under some selling pressure on Friday amid fading optimism surrounding the US President Donald Trump's proposed fiscal policies, which further dimmed prospects of a Fed rate-hike move at its upcoming meeting in March.

Thursday's comments from Treasury Secretary Steven Mnuchin, providing little details for the proposed tax reforms, did little to ease market concerns and collaborated to broad based US Dollar selling pressure, despite of the Fed's readiness to raise interest-rates "fairly soon".

Meanwhile, the prevalent cautious investors' sentiment, as depicted by weaker trading sentiment surrounding European equity markets and sliding bond yields, provided an additional support to the Japanese Yen's safe-haven appeal and dragged the pair to its lowest level since Feb. 9.

Later during NA session, second tier US economic releases - new home sales and Revised UoM Consumer Sentiment index, would be looked upon for some immediate respite for the US Dollar bulls.

Technical levels to watch

Currently trading around 112.45-40 region, immediate support is seen near 112.30 horizontal level below which the pair is likely to break through 112.00 handle and head back towards 111.65-60 multi-month lows support.

On the upside, recovery back above 112.60 level, leading to momentum above 112.80 region, now seems to lift the pair towards 113.20-25 resistance area ahead of weekly highs resistance near 113.75-80 region.

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 112.65

33% Bullish
33% Bearish
33% Sideways

Bias Neutral

1 Month

Avg Forecast 114.51

62% Bullish
8% Bearish
31% Sideways

Bias Bullish

1 Quarter

Avg Forecast 115.76

61% Bullish
0% Bearish
39% Sideways

Bias Bullish

Author

Haresh Menghani

FXStreet

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

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