USD/JPY: will this key support hold, or are investors that concerned?
- The New York Times cited two people briefed on John Dowd resigning
- USD/JPY: bears a little chastened by the possibility of a double bottom here.
USD/JPY has dropped tot he descending channels previous resistance currently, trading at 105.29, up 0.01% on the day, having posted an early Asian high at 105.43 and low at 105.26 while, from the previous sessions, the yen had been as low as 105.85 in European trade.
The dollar has a better day on Thursday, but the yen was picking up the safe haven bid on the tariff noise. There were two key headlines with Trump signing USD50 bln China tariffs and citing that this will be first of many and John Dowd resigning - The New York Times cited two people briefed on John Dowd resigning as Trump's top lawyer in the Mueller probe.
As a result, Wall Street plunges… again
More here:
White House mayhem: VIX spiking, but dollar higher, stocks and USD/JPY recovering from major sell-off
As for the US 10yr treasury yield, it fell from 2.88% to as low as 2.80% while equities extended losses and investors looked for an exit. 2yr yields fell a net 2bp to 2.28% by the close of play. Investors were also looking to the NY. Fed fund futures’ yields which fell a little, but continued to price two more hikes in by end-2018, (June has a 78% chance).
USD/JPY levels
We have been as low as this once this year in Feb where 105.26 held, also it held as far back as Aug/Oct 2014 and April 2016. This is a key level of support, meeting the 2018 bearish channel's descending resistance. USD/JPY bears a little chastened by the possibility of a double bottom here.
However, "the late bounce is well short of supporting further gains ahead," explained Valeria Bednarik, chief analyst at FXStreet, who added, "technical indicators are barely correcting overbought conditions, while the pair remains well below its 100 and 200 SMAs, with the shortest now around 106.20, providing an immediate dynamic resistance for the upcoming sessions."