USD/JPY trades at weekly lows near 109.70 as risk aversion dominates


  • 10-year US T-bond yield drops to lowest level since Dec. 2017.
  • US stocks suffer heavy losses on Thursday.
  • US Dollar Index fails to hold above 98.

The USD/JPY pair met a renewed selling pressure in the American trading hours amid intensifying flight-to-safety and touched its lowest level in a week at 109.68. As of writing, the pair was down 0.6% on a daily basis at 109.70.

Earlier today, U.S. Secretary of State Mike Pompeo claimed that Huawei was "deeply tied" to the Chinese Communist Party and said that more U.S. companies would cut ties with the company, further escalating the tensions. The 10-year Treasury bond yield extended its daily slide and slumped to its lowest level since December of 2017 and major U.S: equity indexes started the day in the negative territory with the CBOE Volatility Index, Wall Street's fear gauge, jumping nearly 20%.

On the other hand, the IHS Markit's Flash PMI report revealed that the business activity in both the manufacturing and service sectors in the U.S. expanded at a much slower rate than expected in May and weighed on the greenback.

Following a rally to its highest level in nearly two years at 98.37, the US Dollar Index reversed its course and slumped to the 98 area, not allowing the pair to stage a recovery.

Later in the session, FOMC members Kaplan, Daly, Bostic, and Barkin will be delivering speeches. However, the risk perception is likely to remain as the primary driver of the pair's action. In the early Asian session, inflation data from Japan will be looked upon for fresh impetus.

Technical levels to watch for

USD/JPY

Overview
Today last price 109.7
Today Daily Change -0.66
Today Daily Change % -0.60
Today daily open 110.36
 
Trends
Daily SMA20 110.52
Daily SMA50 111.03
Daily SMA100 110.52
Daily SMA200 111.43
Levels
Previous Daily High 110.63
Previous Daily Low 110.24
Previous Weekly High 110.2
Previous Weekly Low 109.02
Previous Monthly High 112.4
Previous Monthly Low 110.8
Daily Fibonacci 38.2% 110.39
Daily Fibonacci 61.8% 110.48
Daily Pivot Point S1 110.19
Daily Pivot Point S2 110.02
Daily Pivot Point S3 109.8
Daily Pivot Point R1 110.58
Daily Pivot Point R2 110.8
Daily Pivot Point R3 110.96

 

 

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