USD/JPY - Will it test 100-DMA support?

Omkar Godbole FXStreet Contributor

The Dollar-Yen pair is looking to extend the three-day losing streak, but is having a tough time chewing through 111.99 (38.2% Fibonacci retracement of the Trump rally).

Uncertainty is on the rise across Europe & in the US

Things are heating up in the UK as May government is reportedly preparing for Nicola Sturgeon to use the start of the country's exit from the EU to call another vote on Scottish independence. Meanwhile, the run up to French Presidential elections is proving out to be a most volatile one.

Across the pond, the Trump administration is struggling to match up to the heightened expectations on the fiscal policy front.

Trump speech on Tuesday is likely to be big on rhetoric and short on substance. No wonder, the Treasury yields are on the back foot. Thus, overall situation looks anti-USD. The bid tone around the Japanese Yen could gather pace if the equity markets turn risk averse.

The Dollar-Yen pair could drop to 100-DMA level of 111.51 on a potential risk-off action in the markets. The pair could hold support around 112.00 levels if the core durable goods number and US GDP blow past expectations.

USD/JPY Technical Levels

The spot was last seen trading around 112.10 levels. A break below 111.99 (38.2% fib) would expose 111.61 (Feb lows), under which the 100-DMA level of 111.51 could come into play. On the higher side, breach of hurdle at 112.31 (session high) could yield a rally to 112.77 (5-DMA) and 113.00 (zero figure) levels.

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Neutral	Shrinking
1H	Bearish	Neutral	Low
4H	Bullish	Neutral	High
1D	Bearish	Neutral	Low
1W	Bullish	Neutral	Shrinking
Updated Feb 23, 07:30 GMT

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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