USD/JPY tumbles to 4-month lows amid broad based USD weakness

Haresh Menghani FXStreet

The USD/JPY pair remained under heavy selling pressure on Monday and has now dropped to its lowest level since Nov. 18 near 110.20-15 band.

A fresh wave of greenback selling pressure, with the key US Dollar Index sliding to the lowest level since early Feb. in reaction to the US president Donald Trump's failure to push through the healthcare reform bill, has been a key factor weighing on the major.

Adding to this, the prevalent risk-off sentiment, which tends to benefit the Japanese Yen's safe-haven appeal, further collaborated to the offered tone surrounding the major.

With a lighter US economic docket, traders on Monday will focus on speech from the FOMC member Charles Evans for some immediate respite for the US Dollar bulls.

In the meantime, broader market risk sentiment would remain a key determinant of the pair's movement during European trading session.

Technical levels to watch

From current levels, the 110.00 handle would be looked upon to extend some immediate support. A convincing break below this immediate support would turn the pair vulnerable to extend its downward trajectory further towards its next support near 109.20 area, with some intermediate support near 109.75-70 zone.

On the upside, any recovery move above 110.60 immediate resistance now seems to confront strong resistance near the 111.00 handle, above which a bout of short-covering could lift the pair towards 111.25-30 resistance area.

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 111.56

50% Bullish
50% Bearish
0% Sideways

Bias Neutral

1 Month

Avg Forecast 113.42

69% Bullish
12% Bearish
19% Sideways

Bias Bullish

1 Quarter

Avg Forecast 113.99

65% Bullish
12% Bearish
23% Sideways

Bias Bullish

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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