- Wall Street stays in the red on Thursday.
- US 10-year T-bond yield falls nearly 1%.
- US Dollar Index looks to end the day flat above 95.
The USD/JPY pair came under a renewed selling pressure in the NA session and fell to its lowest level since the last day of August at 110.70. As of writing, the pair was trading at 110.80, losing 70 pips, or 0.65%, on the day.
The pair’s recent fall seems to be caused by the broad-based risk aversion. The 10-year T-bond yield, which is generally considered to be an accurate gauge of market sentiment, is down 0.9% at the moment at 2.877%. Furthermore, after starting the day in the negative territory, major equity indexes in the U.S. are having a difficult time recovering their losses amid the uncertainty surrounding the outcome of NAFTA negotiations and the lack of positive developments on the U.S. – China trade relations.
Earlier in the day, the ADP reported that the private sector employment grew by 163K in August following July’s 217K increase. Despite the dismal employment data, the US Dollar Index didn’t hard time staying above the critical 95 handle. The ISM non-manufacturing PMI, which improved to 58.5 in August from 55.7 in July, provided a boost to the greenback and the index was last seen at 95.12, where it was virtually unchanged on the day.
In the Asian session on Friday, overall household spending data and leading economic index from Japan will be featured in the economic calendar.
Technical levels to consider
The initial support for the pair aligns at 110.70 (daily low/100-DMA) ahead of 110 (psychological level) and 109.40 (Jun. 26 low). On the upside, resistances could be seen at 110.95 (20-DMA), 111.30 (50-DMA) and 111.80 (Aug. 29 high).
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