USD/JPY struggling near one-week lows amid risk-off mood

Haresh Menghani FXStreet

The Japanese Yen continues to benefit from global flight to safety and dragged the USD/JPY pair to a one-week low level of 109.20 on Tuesday.

After yesterday's bearish gap, the pair remained under some selling pressure for the second consecutive session and continues to be weighed down by escalating geopolitical tension.

• North Korea's H-Bomb rattles Monday's markets - BBH

The latest news headlines that N. Korea could possibly launch another ICBM-grade rocket before Saturday forced investors seek refuge in traditional safe-haven assets - like the Japanese Yen.

• N. Korea spotted moving ICBM-grade rocket towards west coast

Also collaborating to the pair's heavy offered tone was persistent weakness around the US Dollar, which continues to drift lower in reaction to Friday's dismal US jobs report.

In absence of any major market moving economic releases from Japan, broader market risk sentiment would continue to act as an exclusive driver of the pair's movement on Tuesday.

Later during the NA session, the US factory orders data and speeches from various Fed officials - Brainard, Kashkari, and Kaplan would also be looked upon for some impetus.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes: "the 4 hours chart shows that the price is well below a bearish 200 SMA and stuck around a horizontal 100 SMA, while technical indicators lost downward strength, but remain within negative territory, overall keeping the risk towards the downside."

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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