USD/JPY Slammed to a 5-Week Low of 106.30
The US Dollar weakness against its Japanese counterpart seems to have gained momentum, with the USD/JPY pair now dropping to its lowest level in 5-weeks.
After witnessing a bounce-back on Monday, the USD/JPY pair resumed with its previous week's sharp slide from a 5-weekly high level and extended its weakness for third consecutive day on Thursday on reducing expectations of a Fed rate-hike in June/July. The pair has now dropped to 106.30, below last week's low level printed post disappointing NFP led downfall and heading closer to 106.00 handle.
Moreover, risk-off sentiment prevailing across Asian and European equities is also boosting the safe-haven appeal of the Japanese currency. Given a relatively light economic calendar, with only the scheduled release of US weekly jobless claims data, the pair would continue taking cues from the prevalent risk sentiment around global equity markets.
Technical outlook
Valeria Bednarik, Chief Analyst at FXStreet notes, "In the short term, the 1 hour chart shows that the price is well below a bearish 100 SMA,, whilst the technical indicators have recovered modestly within negative territory, with not enough strength to confirm an upward continuation at the time being. In the 4 hours chart, the Momentum indicator holds flat below the 100 level while the RSI indicator has barely bounced form oversold readings, also reflecting the absence of buying interest around the pair. Despite movements are expected to be moderated, a break below the 106.60 level should open doors for a steeper decline, down to 105.50 May´s low."
"Support levels: 106.60 106.20 105.90
Resistance levels: 107.20 107.50 107.85"
