“¢ The safe-haven Japanese Yen catches bids amid a fresh wave of risk-aversion trade.
“¢ Subdued USD price action does little to lend any support or stall the ongoing slide.
“¢ Today’s thin US economic docket seems unlikely to provide any meaningful impetus.
The USD/JPY pair met with some fresh supply on Friday and has now moved back within striking distance of over one-week lows set in the previous session.
The pair struggled to build on overnight goodish rebound from the 113.00 neighborhood, with a fresh wave of global risk-aversion trade benefitting the Japanese Yen’s safe-haven status and exerting downward pressure on the major.
A Financial Times report said another round of US tariffs on Chinese imports has been put on hold but a US Trade Representative spokesperson later denied this report and fueled speculations that US-China trade deal is unlikely to happen this month.
Adding to this, a deepening Brexit crisis, after multiple important ministers in the UK, including the Brexit Secretary Dominic Raab, resigned from the UK PM Theresa May’s government, further dented investors’ appetite for perceived riskier assets.
The global flight to safety was evident from a wave of selling across Asian equity markets and further reinforced by a weaker tone around the US Treasury bond yields, which was eventually seen dragging the pair lower through the Asian session on Friday.
Meanwhile, a subdued US Dollar price action did little to lend any support or stall the pair’s ongoing slide to intraday lows, around the 113.20 region. The broader market risk sentiment might continue to act as a key determinant of the pair’s momentum on the last trading day of the week amid a relatively thin US economic docket, featuring the second-tier releases of industrial production and capacity utilization data.
Technical levels to watch
The 113.10-113.00 region might continue to act as an immediate support, which if broken is likely to accelerate the slide towards the 112.70-60 horizontal zone en-route 112.25 support area. On the flip side, the 113.55-60 region now seems to have emerged as an immediate hurdle, above which the pair is likely to aim towards reclaiming the 114.00 handle.
Share
