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1 Sep 2015
USD/JPY extends the drop below 120, risk-off sentiment intensifies
FXStreet (Mumbai) - The USD/JPY pair keeps falling in the European morning, unable to resist the 200-DMA, as the prevailing risk-aversion continues to benefit the Japanese yen as European traders digest the latest weak China data amid ongoing sell-off in the European indices.
USD/JPY rejected at 200-DMA
Currently, the USD/JPY pair trades -0.99% lower at fresh session lows of 119.97, dropping more than 100 pips. The yen trades with sizeable gains versus the US dollar as the safe-haven bids for the Japanese currency keeps increasing as risk-off dynamics hit the European trading session amid tumbling European stocks as China slowdown fears dampen investors sentiment.
The Shanghai Composite Index (SSE) fell over 3% to 3,054.586 points shortly after trading began on Tuesday, before rising to 3,142.03 points to be 2% lower on the day, as of now.
Moreover, the latest set of China manufacturing PMIs further confirmed the ongoing weakness in China, further fuelling the demand for safe-havens such as yen.
While US dollar continues to be heavily dumped as markets now weigh the China concerns and its potential impact on the Sept Fed rate hike decision.
Later in the week ahead, the major is expected to be highly influenced by the US non-farm payrolls data which may set the tone for Fed interest rate-hikes this year. While manufacturing reports from the US due later today will also provide fresh cues for the pair.
USD/JPY Technical levels to consider
To the upside, the next resistance is located 121.14 (Today’s High) levels and above which it could extend gains 121.75 (Aug 31 High) levels. To the downside immediate support might be located at 119.77 (Aug 27 Low) below that at 119 (Psychological levels).
USD/JPY rejected at 200-DMA
Currently, the USD/JPY pair trades -0.99% lower at fresh session lows of 119.97, dropping more than 100 pips. The yen trades with sizeable gains versus the US dollar as the safe-haven bids for the Japanese currency keeps increasing as risk-off dynamics hit the European trading session amid tumbling European stocks as China slowdown fears dampen investors sentiment.
The Shanghai Composite Index (SSE) fell over 3% to 3,054.586 points shortly after trading began on Tuesday, before rising to 3,142.03 points to be 2% lower on the day, as of now.
Moreover, the latest set of China manufacturing PMIs further confirmed the ongoing weakness in China, further fuelling the demand for safe-havens such as yen.
While US dollar continues to be heavily dumped as markets now weigh the China concerns and its potential impact on the Sept Fed rate hike decision.
Later in the week ahead, the major is expected to be highly influenced by the US non-farm payrolls data which may set the tone for Fed interest rate-hikes this year. While manufacturing reports from the US due later today will also provide fresh cues for the pair.
USD/JPY Technical levels to consider
To the upside, the next resistance is located 121.14 (Today’s High) levels and above which it could extend gains 121.75 (Aug 31 High) levels. To the downside immediate support might be located at 119.77 (Aug 27 Low) below that at 119 (Psychological levels).