USD/JPY pushes lower to new 5-month low
The USD/JPY pair continued its relentless march lower in the U.S. afternoon and touched its fresh five-month low at 109.53. At the moment the pair is at 109.64, more than 100 pips lower from where it started the day.
The JPY bulls gathered strength on Tuesday against its major rivals as investors searched for shelter in traditional safe havens. The EUR/JPY lost more than 100 pips while the GBP/JPY dropped 60 pips. Lower risk appetite was also demonstrated by the weak performance of U.S. stocks as all the major equity indexes closed the day with losses.
- Wall Street ends lower as investors seek refuge
The economic docket is unlikely to provide any fresh impetus for the pair during the Asian session as it only features some low-level data such as the Domestic Corporate Goods Price Index released by the Bank of Japan and the Machinery Orders for March. The primary focus will be on the developments surrounding the geopolitical tensions in Syria and North Korea.
“As the global macro picture gets muddied a bit by some strong words from North Korea and the president’s tweets, that’s spooked markets that were already in a bit of a risk-off tone, to begin with,” Michael Lorizio, a Boston-based senior trader at Manulife Asset Management, told Reuters.
Technical outlook
A breach of 109.53 (daily low) would aim for 109.00 (psychological level) and 108.55 (Nov. 17 low) in near-term. On the upside, the immediate hurdle aligns at 110 (psychological level) followed by 111.00/05 (psychological level/20-DMA) and 112.20 (Mar. 31 high).
