- USD/JPY witnessed some heavy selling on Wednesday amid a broad-based USD weakness.
- Technical selling below the 105.00 mark further aggravated the intraday bearish pressure.
- September monthly swing lows, around the 104.00 is the next relevant target for bears.
The USD/JPY pair continued losing ground through the early North American session and tumbled to fresh one-month lows, around the 104.60-55 region in the last hour.
Following the overnight modest pullback from the 105.75 region, the pair came under intense selling pressure on Wednesday and was being pressured by the bearish sentiment surrounding the US dollar. Positive developments surrounding the next round of the US fiscal stimulus raised prospects for more government borrowing and sparked a selloff on the US bonds. The lack of demand for government debt was seen as one of the key factors that continued exerting downward pressure on the greenback.
It is worth recalling that hopes for a pre-election stimulus package revived after White House chief of staff Mark Meadows said on Tuesday that House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have made good progress on stimulus talks. Adding to this, the US President Donald Trump said that he was willing to accept a large aid bill, despite opposition from his own Republican party in the Senate. Investors, however, remained sceptic as negotiations are set to continue on Wednesday.
Apart from this, the prevalent cautious mood – as depicted by a flat opening in the US equity markets – extended some additional support to the safe-haven Japanese yen and further contributed to the USD/JPY pair sharp slide. The downward trajectory took along some short-term trading stops placed near the key 105.00 psychological mark. A subsequent fall below the previous monthly swing lows aggravated the intraday bearish pressure and dragged the USD/JPY pair to its lowest level since September 22nd.
It will now be interesting to see if the pair is able to find any support at lower levels or continues the bearish fall amid extremely oversold conditions on intraday charts. Nevertheless, the stage seems set for further weakness, possibly back towards challenging September monthly swing lows support near the 104.00 round-figure mark.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.