- Pessimism surrounding global growth and political uncertainty keep traders on edge.
- The USD/JPY’s sustained dips beneath 50-day SMA signals come back of 109.70 support.
USD/JPY tests the intra-day low of 110.30 as the Tokyo markets open on Thursday. Traders reacted to the global slowdown fears as reflected via extended downturn of the US treasury yields and pessimism at the Wall Street. The US GDP and risk events will be in the limelight for the rest of the day.
10-year yield for the US government bond dropped to the lowest since December 2017 by being around 2.35%, that’s well below Friday’s print of 2.377% that triggered a global sell-off by crossing 3-month yields and indicating 2007-like recession of the world’s largest economy.
German bunds also slid deeper into the negative territory after the European Central Bank (ECB) President Mario Draghi signaled increasing challenges to the regional economy and preferred to stay away from monetary policy tightening.
Wall Street also took the red with Dow Jones Industrial Average losing 0.1while the S&P 500 index declining 0.5% and Nasdaq trimming 0.6%.
In addition to dovish signals from the central bankers like ECB and RBNZ, comments from the to-be Fed Governor, Stephen Moore, also weighed on investor sentiment. Furthermore, Brexit is still a looming uncertainty that adds worries for global traders.
Coming up in the focus will be on updates from the two-day Beijing visit of the US delegates and the US Q4 GDP’s final version. Forecasts suggest 2.4% growth figure for the annualized gross domestic product during the US fourth quarter (Q4) against 2.6% prior.
USD/JPY Technical Analysis
Having slipped under 50-day simple moving average (SMA), the USD/JPY pair again highlights 109.70 support, a break of which can recall 109.00
On the upside clearance of 110.55 SMA figure can recall 111.15 comprising 100-day SMA.
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