Dollar/yen reversed directions in dramatic fashion, sliding 3.0% last week. This week’s highlights are U.S. nonfarm payrolls and wage growth.
As the coronavirus continues to spread, jittery investors flocked to the safe-haven Japanese yen. USD/JPY touched a low of 107.51 last week, its lowest level since early October. Although the U.S economy remains in good shape, reports of a coronavirus victim in the U.S. sent U.S. stock markets sharply lower and dragged the greenback lower as well.
In the U.S., durable goods orders reports were mixed. The headline figure declined by 0.2%. This beat expectations but was much lower than the gain of 2.4% a month earlier. However, core durable goods orders jumped 0.9%, its strongest gain in seven months. Preliminary (second estimate) GDP came in at 2.1%, confirming the initial estimate. This points to respectable growth for the U.S. economy.
Key news updates for USD/JPY
USD/JPY Technical Analysis
We start with resistance at 111.69.
110.62 is next.
109.73 has some breathing room following sharp losses by USD/JPY last week.
108.70 (mentioned last week) has switched to a resistance line.
108.10 is fluid, as USD/JPY ended the week just below this line.
107.30 is providing support.
106.61 has held in support since early October.
105.55 is the final support line for now.
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I am neutral on USD/JPY
The yen cashed in last week, as its safe-haven status was a magnet for nervous investors. At the same time, the coronavirus outbreak continues to take a toll on the Japanese economy, which could make the yen less attractive to investors.