USD/JPY down -1.14% on the day, 'heavy gravity' drags pair towards 100-DMA

Currently, USD/JPY is trading at 112.47, down -1.14% or (128)-pips on the day, having posted a daily high at 113.96 and low at 112.08.

The American dollar vs. Japanese yen crashed below the well-supported 113.00 round figure mark. Furthermore, the US economic docket delivered negative readings after Consumer Confidence printed 'a worse than expected' result at 111.8 which is below consensus and previous figures. Earlier, the Chicago Purchasing Managers' Index had the same faith as the figure was -4.7 below consensus and -4.3 from previous; both cases drained long-dollar positions.

Historical data available for traders and investors indicates during January that USD/JPY pair had the best trading day at +1.76% (Jan.18) or 201-pips, and the worst at -1.65% (Jan.05) or (190)-pips.

Trump's next target: 'Astronomical' drug pricing

Bloomberg reports, "President Donald Trump told drugmakers at a White House meeting Tuesday they were charging too much and promised to get better bargains for government health programs, in addition to finding ways to get new medicines to market faster. “The pricing has been astronomical,” Trump said to chief executives of some of the world’s biggest drugmakers, who came to Washington after his criticism of the industry earlier this month sent drug and biotechnology stocks plunging. “You folks have done a very great job over the years but we have to get the prices down.”

The report continues, "At the same time, Trump promised to slash regulations, get new treatments to market faster at the Food and Drug Administration, and increase international competition. “We’re going to streamline FDA; we have a fantastic person” that will be announced to lead the agency soon, Trump said. He also promised to cut taxes on business and lure companies back to the U.S."

Technical levels to watch

In terms of technical levels, upside barriers are aligned at 113.95 (today's high), then at 114.92 (50-DMA) and above that at 116.85 (high Jan.11). While supports are aligned at 110.60-80 region (horizontal support), later at 109.33 (100-DMA) and below that at 107.17 (200-DMA). On the other hand, Stochastic Oscillator (5,3,3) seems to continue south from a previous bearish divergence, therefore, there is evidence to expect further Japanese yen gains in the near term. 

On the long term view, if 118.59 (high Jan.1) is in fact, a medium-term top, the upside seems limited for the pair at 115.55 (short-term 61.8% Fib), also 112.37 (short-term 50.0% Fib) would become another resistance level if prices open and close below it. To the downside, supports are aligned at 111.64 (long-term 50.0% Fib), then at 109.19 (short-term 38.2% Fib) and finally below that at 105.26 (short-term 23.6% Fib). 

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