- Yen gains momentum amid risk aversion.
- Trade war concerns and more potential changes in Trump’s administration weighed on sentiment.
- US data: retail sales disappoint with another slide while PPI rises 0.2%.
USD/JPY broke below 106.30 and dropped to 106.04, reaching the lowest level since last Thursday. The pair was holding near the lows with the bearish tone intact.
The yen climbed across the board on the back of risk aversion amid fears of a trade war and concerns about Trump’s cabinet. The Dow Jones was falling almost 250 points after opening the day in green. The S&P 500 was down 0.40%. US bond were rising sharply pushing yields to the downside.
Data released earlier today, showed that retail sales contracted 0.1% in February (against expectation of a 0.3% gain) while core sales climbed 0.2%. The Producer Price Index rose 0.2% above the 0.1% expected (2.8% annual rate). The US dollar weakened immediately after the report but then recovered the lost ground. It was among the top performer of the US session, excluding the yen.
To the downside, support levels are seen at 106.00, 105.85 and 105.45. On the upside, immediate resistance is now seen 106.30 (previous daily low) followed by 106.70 (daily high) and 106.95/00 (Mar 9 & 12 high).
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