- Yen seems to have picked up a bid, tracking losses in the Asian equities.
- USD/JPY dipped below the 200-day MA of 110.16 but holds above key support of 110.04.
- Close below 110.04 would abort the bullish view.
The USD/JPY printed a session low of 110.07 and was last seen trading at the 200-day MA of 110.16.
The drop in the Asian stocks could have played a role in pushing the USD/JPY lower. As of writing, the Shanghai Composite index is reporting a 0.36 percent drop. Regional majors like South Korea’s Kospi and Hong Kong’s Hang Seng and Australi’s S&P/ASX 200 are also flashing red.
Further, the renewed tensions in the Korean peninsula and US-China trade tensions may have put a bid under the anti-risk Japanese Yen.
That said, the outlook remains bullish as long as the pair trades above support at 110.04 (61.8 percent Fibonacci retracement of the Jan-Mar sell-off). Also, the dip could be short-lived as the US 10-year treasury yield remains near 3.10 percent (the highest level since 2011).
USD/JPY Technical Levels
A break above 110.40 (yesterday’s low) would open up upside towards 110.84 (Nov. 27 low) and 111.25 (trend resistance). On the downside, close below 110.00 (psychological level) could yield a deeper pullback to 108.65 (May 4 low) and 108.40 (descending 100-day moving average).