USD/JPY Sell-Off Continues, Tumbles Below 109.00 Level

USD/JPY Sell-Off Continues, Tumbles Below 109.00 Level

2 June 2016, 16:27
Roberto Jacobs

USD/JPY Sell-Off Continues, Tumbles Below 109.00 Level

Despite of a broader recovery for the greenback, tracked by the US Dollar Index, the USD/JPY pair maintained its undertone and extended its slide further below 109.00 handle to currently trade around the mid-point of 108.00 level. 

Yen's surge against its US counterparts is being supported by a fall in equity markets that continued to boost the safe-haven appeal of the Japanese currency. The USD/JPY pair's fall got further aggravated after a BoJ board member, Takehiro Sato's harsh comments on Japan's negative interest-rate policy. 

On the economic data front, the ADP report on US private-sector employment showed economy added 173k new private-sector jobs during the month of May, while weekly jobless claims dropped by 1,000 to 267,000. Both the labor market indicators printed figures that were broadly in-line with consensus estimates ahead of the Friday official jobs report, which directly relates to the Fed's monetary policy stance during its meeting on June 15. 

Technical outlook 

Valeria Bednarik, Chief Analyst at FXStreet notes, "the 1 hour chart shows that the price is well below its moving averages, whilst the technical indicators have lost downward strength but remain within bearish territory. In the 4 hours chart, the technical indicators maintain their sharp bearish slopes near oversold levels, whilst the price is currently being capped by the 200 SMA, now around 109.20, in line with further slides for today."

"Support levels: 108.70 108.30 107.95
Resistance levels: 109.20 109.50 110.00"


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