- Risk-aversion allows JPY to stay strong against its rivals on Friday.
- US Dollar Index loses momentum ahead of 97.
- Coming up: Markit Manufacturing and Services PMI for the U.S.
The USD/JPY pair came under a modest selling pressure in the last hour and slumped to its lowest level of the day at 112.71. As of writing, the pair was trading at 112.74, losing 0.2% on a daily basis.
Although the greenback stays resilient against most of its rivals with the US Dollar Index advancing toward the 97 handle, the pair struggles to gain traction as the risk-off mood allows the JPY to find demand. Concerns over an economic slowdown in the euro area and the uncertainty surrounding the Brexit deal weigh on major equity indexes in Europe to show that investors are staying away from riskier assets.
Additionally, yet another sharp drop witnessed in crude oil prices weighs on the sentiment on Friday as well.
Later in the day, the IHS Markit will publish the preliminary manufacturing and service sector PMI data from the United States. Although stocks markets will be open for a half day today following yesterday’s Thanksgiving break, the trading action is likely to remain subdued in Wall Street.
Technical levels to consider
The initial support for the pair could be seen at 112.60 (Nov. 18 low) ahead of 112.15 (100-DMA) and 111.60 (Oct. 15 low). On the upside, resistances are located at 113.00 (psychological level/daily high/50-DMA), 113.40 (Oct. 31 high) and 113.70 (Nov. 15 high).
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