USD/JPY slumps below 107 on dismal US data, risk aversion

CB Consumer Confidence Index drops to 121.5 in June.
New home sales contract by 7.8% on a monthly basis in May.
10-year US T-bond yields drops below critical 2% mark.

Eren Sengezer FXStreet

The USD/JPY pair came under a renewed selling pressure in the American session and dropped below the 107 mark amid the ongoing broad USD weakness and the stronger demand for safe havens. As of writing, the pair was trading at 106.92, losing 0.33% on a daily basis.

Today's data from the U.S. revealed that the consumer confidence continued to weaken in June with the Conference Board's Consumer Confidence Index dropping to its lowest level since 2017 at 121.5 from 131.1 in May to make it difficult for the US Dollar Index to stage a recovery despite the extreme oversold conditions. Other data from the U.S. showed that new home sales declined by 7.8% in May to miss the market expectation of +1.9% and the Richmond Fed Manufacturing Index retreated to 3 in June from 5 in May.

Now markets are waiting for FOMC Chairman Powell to deliver his remarks on the monetary policy later in the session. Earlier today, NY Fed President Williams didn't touch on the policy outlook in his prepared remarks. At the moment, the US Dollar Index is unchanged on the day at 96.

Meanwhile, the fact that the 10-year US Treasury Bond yield dropped below the critical 2% mark keeps the bearish pressure on the strongly correlated USD/JPY pair intact. Just recently, U.S. President Donald Trump tweeted out that any attack by Iran on anything American will be met with "great and overwhelming force," suggesting that the tension in the Middle East is unlikely to ease anytime soon.

Technical levels to watch for

USD/JPY

Overview
Today last price	106.96
Today Daily Change	-0.34
Today Daily Change %	-0.32
Today daily open	107.3

Trends
Daily SMA20	108.38
Daily SMA50	109.81
Daily SMA100	110.41
Daily SMA200	111.13

Levels
Previous Daily High	107.54
Previous Daily Low	107.24
Previous Weekly High	108.73
Previous Weekly Low	107.04
Previous Monthly High	111.71
Previous Monthly Low	108.23
Daily Fibonacci 38.2%	107.36
Daily Fibonacci 61.8%	107.43
Daily Pivot Point S1	107.18
Daily Pivot Point S2	107.07
Daily Pivot Point S3	106.89
Daily Pivot Point R1	107.48
Daily Pivot Point R2	107.65
Daily Pivot Point R3	107.77

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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