USD/JPY weakens farther below 107.00 handle, fresh multi-month lows

Fears of a full-blown US-China trade war boosted the JPY’s safe-haven demand.
Sliding US bond yields weighed on the USD and further added to the selling bias.
Investors now look forward to the US monthly jobs report for a fresh impetus.

Haresh Menghani FXStreet

Having failed to capitalize on its early uptick to 107.25 area, the USD/JPY pair dropped to fresh multi-month lows during the early European session on Friday.

The pair remained under some heavy selling pressure on Friday and added to the overnight slump of over 200-pips - marking its biggest single-day drop in two-years, triggered by the US President Donald Trump's decision of new tariffs on more Chinese goods.

Trump on Thursday announced that his administration would impose an additional 10% tariff on the remaining $300 billion worth of Chinese imports on Sept. 1 and rattled global financial markets, which provided a strong boost to traditional safe-haven assets.

Meanwhile, the latest leg of a sudden drop over the past hour or so came after China’s Ministry of Commerce (MOFCOM) reiterated to take countermeasures if US tariffs take effect and that China is not afraid of a trade war.

The global flight to safety was evident from a follow-through slide in the US Treasury bond yields, which further exerted some downward pressure on the US Dollar and collaborated to the pair's ongoing slide to the lowest level since early-January flash crash lows.

It would now be interesting to see if the pair is able to find any support at lower levels or continues with its bearish trajectory, despite highly oversold conditions, as the focus now shifts to Friday's important release of the closely watched US monthly jobs report - NFP.

Technical levels to watch

USD/JPY

Overview
Today last price	106.92
Today Daily Change	-0.42
Today Daily Change %	-0.39
Today daily open	107.34

Trends
Daily SMA20	108.26
Daily SMA50	108.28
Daily SMA100	109.63
Daily SMA200	110.47

Levels
Previous Daily High	109.32
Previous Daily Low	107.25
Previous Weekly High	108.83
Previous Weekly Low	107.7
Previous Monthly High	109.01
Previous Monthly Low	107.21
Daily Fibonacci 38.2%	108.04
Daily Fibonacci 61.8%	108.53
Daily Pivot Point S1	106.62
Daily Pivot Point S2	105.9
Daily Pivot Point S3	104.55
Daily Pivot Point R1	108.69
Daily Pivot Point R2	110.04
Daily Pivot Point R3	110.76

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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