Search ForexCrunch
  • Wall Street pushes lower after starting the day in the red.
  • US Dollar Index drops toward mid-95s despite upbeat data.
  • Coming up: Overall household spending & labour cash earnings from Japan.

After recording its highest daily close in more than 18 months at 114.53, the USD/JPY pair struggled to preserve its momentum and spent the first half of the day moving sideways above 114. However, with the greenback losing its strength in the second half of the day and risk-aversion dominating the market action, the pair lost its traction and fell to its lowest level of the day at 113.64. At the moment, the pair is down 0.7% on the day at 113.75.

Although today’s data from the U.S. showed that factory orders rebounded in August after declining in July and the weekly jobless claims continued to decrease last week, the US Dollar Index broke below the 96 mark  to reveal a broad-based selling pressure surrounding the greenback. As of writing, the US Dollar Index was down 0.35% on a daily basis at 95.65.

Meanwhile, major equity indexes started the day lower and extended their losses to reflect a weak appetite for risky assets, which helps the safe-haven JPY stay resilient against its peers. Dragged lower by the dismal performance of technology shares, the S&P 500 and the Dow Jones Industrial Average are both down 0.75%.

There won’t be any other macroeconomic data releases from the U.S. in the remainder of the day and investors will be waiting for the overall household spending, labour cash earnings, and leading economic index from Japan.

Technical levels to consider

The initial support for the pair could be seen at 113.50 (Oct. 3/2 low) ahead of 112.80 (20-DMA) and 111.70 (50-DMA). On the upside, resistances are located at 114 (Oct. 1 high), 114.50 (Oct. 3 high) and 115 (psychological level).