- USD/JPY declined sharply on Thursday as uncertainty steaming from tensions between the United States and North Korea prompted investors to seek safe haven assets such as Japanese yen.
- In a war of words between Washington and Pyongyang that has unnerved regional powers and global investors, North Korea dismissed as a "load of nonsense" warnings by U.S. President Donald Trump that it would face "fire and fury" if it threatened the United States.
- Japanese yen extended gains after data showed U.S. producer prices unexpectedly fell in July, recording their biggest drop in nearly a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.
- The market was waiting for U.S. consumer inflation data on Friday that would offer more clues about future Fed decisions.
- The pair remains under bears control unless until it trades below 109.94 resistance, therefore it is good to buy this pair on dips.
- To the upside, the strong resistance can be seen at 109.60, a break above this level would take the pair towards next resistance level at 109.94.
- To the downside immediate support can be seen at 109.28, a break below this level will open the gates towards next level at 109.00.
Resistance Levels
R1: 109.60 (50% Retracement level)
R2: 109.94 (61.8% Retracement level)
R3: 110.13 (Aug 10thth high)
Support Levels
S1: 109.28 (38.2 % Retracement level)
S2: 109.00 (Psychological level)
S3: 108.83 (23.6 % Retracement level)
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