FXStreet (Córdoba) – USD/JPY extended the decline and is now approaching daily lows as stocks in the US turn negative. The pair remains under pressure trading near the lows, around the same level it closed yesterday but it appears to be headed to test 117.20.
USD/JPY erases all gains
Greenback lost strength against European currencies and the yen as the Dow Jones moved into negative territory; the index was falling 0.20% while the Nasdaq was down almost 1%. Crude oil hit a fresh daily low below $29.50 and gold was breaking above USD 1090.
Risk aversion boosted the yen in the market and pushed USD/JPY further to the downside. On Asian hours the pair climbed to 118.11 but since then it has fallen 80 pips. Recently dropped to 117.31, area located lest than 10 pips above daily lows that lie at 117.22.
USD/JPY technical outlook
“Technically, the 1 hour chart shows that the price is now below its 100 and 200 SMAs that anyway maintain their bearish slopes, while the indicators have eased from overbought readings towards their mid-lines, where they currently stand”, said Valeria Bednarik, Chief Analyst at FXStreet.
She notes that in the 4-hour chart Momentum indicator heads higher above its 100 level but the RSI already turned lower and stands around 48, “anticipating some further declines on a downward acceleration below 117.30, the immediate support.”
(Market News Provided by FXstreet)