USD/JPY tumbles to 1-week lows near 113.30
- Risk aversion and lower US yields sent USD/JPY lower.
- US dollar having the worst day in three weeks against the Japanese yen.
The USD/JPY pair moved most of ht day in a range between 113.70 and 113.99 until the US session when it broke decisively to the downside. The pair lost 50 pips in a few hours and bottomed at 113.28, the lowest level in a week.
Near the end of the session, while market participants await more news regarding the UK Cabinet meeting on Brexit, USD/JPY trades slightly above the lows. Since the beginning of the week, USD/JPY tested levels on top of 114.00 but failed to consolidate and now the technical outlook looks more on the bearish side.
The yen gained momentum across the board on the back of risk aversion and lower US yields. The10-year fell to 3.09%, the lowest since October 30. At the same time, gold jumped above $1210 and the Dow Jones losses 0.85%.
Technical outlook
“The 4 hours chart for the pair shows that it is still developing well above its 100 and 200 SMA, both around the 113.00 level and with the shortest advancing below the larger one as technical indicators resume their declines within negative levels, skewing the risk to the downside”, said Valeria Bednarik, Chief Analyst at FXStreet.
According to her, renewed selling interest below 113.20, now the immediate support should lead to a steeper decline, particularly if Asian shares follow the lead of their overseas counterparts.
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
