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FxWirePro: USD/JPY extends retreat below 111 handle as traders pile into safe-haven Yen amid rising risk-off

USD/JPY chart on Trading View used for analysis

  • USD/JPY is extending retreat below 111 handle as the Japanese currency picked up a bid on escalating US-China trade tensions.
     
  • The Trump administration is likely to impose a fresh set of duties on $200bn (£155bn) of Chinese goods later today, having levied 25% tariffs on $50 billion worth of Chinese exports in July.
     
  • Also, traders remain cautious ahead of crucial US NFP data due later today.
     
  • Recent US data has been upbeat, reinforcing the case for two more rate hikes from the Federal Reserve this year.
     
  • The Greenback will resume upside and is likely to stay buoyed on an upbeat employment report.
     
  • Technical studies on intraday charts has turned bearish. Stochs and RSI have turned and RSI has slipped below 50 mark.
     
  • Price action is currently holding support at 110-EMA at 110.44 and breach below will see further weakness.
     
  • 38.2% Fib at 109.91 looks like the immediate bear target on break below 110-EMA. Further weakness will take the pair to 200-DMA at 109.78.
     
  • On the flip side, break above 111.75 (trendline and upper BB) is required for further upside.

Support levels - 110.44 (110-EMA), 110, 109.91 (38.2% Fib), 109.78 (200-DMA)

Resistance levels - 111.06 (5-DMA), 111.15 (23.6% Fib), 111.75 (trendline), 112

FxWirePro Currency Strength Index: FxWirePro's Hourly USD Spot Index was at -22.6791 (Neutral), while Hourly JPY Spot Index was at 143.454 (Bullish) at 0300 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
 

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