USD/JPY nosedives to fresh six-month lows, risks breaking below 105.00 mark

• USD/JPY remains under some intense selling pressure amid intensifying safe-haven demand.
• Collapsing US bond yields, Fed rate cut speculations continued weighing heavily on the USD.
• Bears seemed rather unaffected by extremely oversold conditions ahead of the US jobs data.

The USD/JPY pair tumbled to fresh six-month lows in the last hour, with bears now eyeing a sustained break below the key 105.00 psychological mark.

The coronavirus outbreak continued stoking fears of a prolonged global economic slowdown, which provided a strong boost to the Japanese yen’s perceived safe-haven status and forced the pair to extend its relentless fall on the last trading day of the week.

The bearish pressure remains unabated

As the risk aversion intensified, the US Treasury bond yields witnessed an epic meltdown and were further pressurized by speculations of another 50bps Fed rate cut on March 18. This exerted some heavy pressure on the US dollar and collaborated to the pair’s ongoing fall to the lowest level since late-August.

Friday’s downfall could further be attributed to some follow-through technical selling following the previous day’s sustained break below the 106.60 strong horizontal support. Meanwhile, bearish traders seemed rather unaffected by extremely oversold conditions on short/medium-term charts.

Hence, some follow-through weakness, towards testing 2019 swing lows support near the 104.45 region, now looks a distinct possibility. Friday’s important release of the US monthly jobs report will now be looked upon for some immediate respite to the USD bulls and some short-term trading opportunities.

Technical levels to watch