FXStreet (Mumbai) – The US dollar extends its bearish tone versus the Japanese currency in the early European trades, knocking-off USD/JPY below 123 handle. The dollar-yen pair accelerates losses after the US dollar ran through fresh sellers heading into the European session as the latest FOMC’s dovish statement keeps the USD bulls undermined.
USD/JPY breaks below 123
Currently, the USD/JPY pair trades -0.39% lower at fresh one week lows of 122.93, retreating from 123.58 session highs. The USD/JPY pair came under renewed selling pressure ahead of Europe open as the European traders weigh the FOMC statement, dragging the US dollar lower across the board. The US dollar index, measuring the relative strength of the greenback against a basket of six major currencies trades -0.24% lower at fresh four week lows of 94.22.
A dovish FOMC statement was followed by Yellen’s comments on Wednesday, which urged focus on the pace of the rate increase rather than the exact timing of lift-off. Chair Yellen noted, “Economic conditions do not yet warrant an increase in the federal funds rate,” “My colleagues and I would like to see more decisive evidence that a moderate pace of economic growth will be sustained.”
Meanwhile, traders now shift their attention towards a host of key US data flow including, US CPI, weekly jobless claims, current account and Philly Fed Manufacturing gauge, which may provide fresh cues on the US dollar moves. While uncertainties surrounding Greece ahead of Euro group meeting later today may keep the yen buoyed.
USD/JPY Technical Levels
To the upside, the next resistance is located at 123.53 (10-DMA) levels and above which it could extend gains 124 (20-DMA) levels. To the downside immediate support might be located at 122.60 (June 11 Low) below that at 122.43 (June 10 Low) levels.
(Market News Provided by FXstreet)