USD/JPY Drops Below 5-DMA as Nikkei Sinks Over 1%
The deterioration of risk conditions in the Asian trades this session
provided the much-needed respite to the JPY bulls, now pushing USD/JPY further below 109 handle.
USD/JPY back below 109 handle
The dollar-yen pair once again met fresh supply near 109.50 levels on
Thursday, and from there continues to extend lower, as the yen jumped
back on the bids on increasing flight to safety amid widespread
risk-aversion. At the moment, the USD/JPY pair drops -0.27% to fresh
session lows of 108.73, depreciating sharply below a break of 5-DMA
located at 108.79 levels. Meanwhile, the Japanese benchmark index, the
Nikkei 225 drops further to 16,40 points, recording a -1.08% loss on the
day.
Moreover, the major remains little affected by a broadly higher US
dollar, as the USD bulls continue to cheer Fed official Rosengren’s
hawkish comments, delivered in the US last session. Boston Fed President
Eric Rosengren noted that the Fed should raise interest rates if data
confirms a stronger jobs market and inflation outlook in the second
quarter.
Next of note for major remains the US dataflow lined up for release
later in the NA session, with main focus on the retail trade data.
USD/JPY Technical levels to watch
In terms of technicals, the immediate resistance is located at 109
(round number). A break above the last, the major could test 109.50
(psychological levels). While to the downside, the immediate support is
seen at 108.65/50 (1h 100-SMA) and below that at 108.00 (round number).
