USD/JPY slumps to 111.15 as risk-off persists at full steam

Risk-off moods intensified in the European session, paving the way for USD/JPY to test 111 handle, as the yen remains on top across the FX board amid increased flight to safety.

The spot extended its week-long sell-off and now meanders near fresh four-month lows struck at 111.15 some minutes ago. The persistent weakness in the treasury yields, in the wake of tumbling European stocks, add to the offered tone behind USD/JPY.

Markets believe a break below 111 handle, will open doors for an extensive sell-off towards 200-DMA located at 109.01 levels in the near-term. Meanwhile, the major remained unperturbed by BOJ’s Kuroda’s latest remarks, citing that BOJ easing will continue until 2% price target is achieved.

Calendar-wise, the Japanese trade data released in Asia, with the economy posting the largest trade surplus in seven years last month. Looking ahead, we have the US existing home sales data, which will provide fresh impetus to the prices.

USD/JPY Technical levels to watch             

The major finds immediate resistance at 111.50 (psychological support-turned resistance). A break above the last, the major could test 112.04/19 (daily pivot/ 5-DMA) and 112.55/56 (classic & Fib R1) beyond the last. While to the downside, the immediate support is seen at 111 (round number/ multi-week low) next at 110.69 (classic S2 & Fib S3) and below that at 110.23 (week ended Nov 20 lows).