“¢ The USD bulls seemed rather unimpressed by the advance US Q3 GDP print.
“¢ A selloff in equities boosted JPY’s safe-haven status and prompts aggressive selling.
The USD/JPY pair quickly reversed the US GDP-led modest uptick to 112.20 area and tumbled to six-week lows in the last hour.
The pair’s attempted recovery move during the early North-American session quickly ran out of steam as investors seemed unimpressed from a slightly better-than-expected US Q3 GDP growth figures.
The same was evident from the ongoing US Dollar retracement from over two-month tops, which coupled with the ongoing slump in the US Treasury bond yields exerted some fresh downward pressure on the major.
Meanwhile, the latest leg of a sudden fall of over 50-pips in the past hour or so could further be attributed to reviving safe-haven demand, triggered by a fresh round of selling in the US equity markets.
Disappointing third-quarter earnings results from tech giants combined with persistent worries about slowing global growth dented investors’ appetite for riskier assets and underpinned the Japanese Yen’s safe-haven demand.
With today’s fall, the pair has reversed nearly 300-pips from YTD tops, around mid-114.00s, touched at the start of this month and is now testing 100-day SMA support, which if broken should pave the way for an extension of the near-term downward trajectory.
Technical levels to watch
A follow-through selling below the mentioned support, near the 111.55 region, is likely to accelerate the fall further towards the 111.10-111.00 support area. On the flip side, any attempted recovery move might now confront immediate resistance near the 112.00 handle and is closely followed by the 112.25-30 supply zone.
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