USD/JPY: Sell-off stalls, but still below 109 on Trump’s jawboning

The USD/JPY pair stalled its overnight slide and has now entered a phase of downside consolidation, as bears await fresh impetus from the sentiment on the European open for next push lower.

The spot remains heavily offered ever since the US President Trump jawboned the US dollar late-NY session yesterday, following which Trump trade began unwinding, knocking-off risky assets such as equities, treasury yields etc.

More so, rising political tensions over North Korea backs the safe-haven bids for the yen, sending the USD/JPY pair crashing to the lowest levels since mid-November. The 10-year treasury yields trade well below 2.30% mark, lowest in five months.

In the session, the major may find fresh sellers as the European traders hit their desks and react negatively to Trump’s comments. Meanwhile, the upcoming US macro data will also have significant impact on the prices.

USD/JPY Technical levels                 

Karen Jones, Analyst at Commerzbank notes, “USD/JPY near term outlook is negative. The market has sold off to the 108.75 200 day ma. Note the 55 week ma also lies here at 108.46 and we suspect will hold the initial test. Failure here will introduce scope to 107.50 July 2016 high then 106.85, the 61.8% retracement.”