- The pair adds to last week’s retracement losses amid reviving safe-haven demand.
- A goodish pickup in the USD demand helped limit deeper losses, at least for now.
The USD/JPY pair held on to its weaker tone through the early North-American session, albeit has managed to rebound around 20 pips from daily lows. Reviving safe-haven demand, amid worries over global economic growth, boosted demand for traditional safe-haven currencies - like the Japanese Yen - and contributed to the pair's follow-through retracement from multi-week tops set last week.
The pair slipped below last week's bearish gap opening lows support near the 107.45 region - coinciding with 23.6% Fibo. level of the 104.45-108.48 recent recovery move from multi-year lows. However, resurgent USD demand helped the pair to find some support near 100-period SMA on the 4-hourly chart, which should now act as a key pivotal point for short-term traders amid relatively quieter trading action.
Meanwhile, technical indicators on hourly charts have been drifting lower within the negative territory and also lost their bullish momentum on the daily chart, suggesting the resumption of the prior/well-established bearish trend. Sustained weakness below the mentioned support, currently near the 107.30 region, will further reinforce the bearish outlook and prompt some aggressive technical selling.
The pair might then accelerate the downfall further towards testing a previous strong resistance breakpoint - near the 106.60 horizontal zone, with some intermediate support near the 38.2% Fibo. level around the 107.00-106.90 region. The downward trajectory could further get extended towards challenging the 106.00 round-figure mark in the near-term - coinciding with 61.8% Fibo. level.
On the flip side, immediate resistance is now pegged near the 100-day SMA, around the 107.90 region, which if cleared decisively might now set the stage for a move beyond the recent swing highs - around mid-108.00s - towards reclaiming the 109.00 round-figure mark en-route the very important 200-day SMA barrier, currently near the 109.30 region.
USD/JPY 4-hourly chart
-637048444520371545.png)
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
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.