Trading news

USD/JPY reverses tepid recovery gains, drops to fresh weekly lows

The USD/JPY pair reversed tepid recovery gains to mid-113.00s and turned negative for the third consecutive session.

Currently trading around 113.10-55 region, the pair dropped to fresh weekly low and has now moved on the brink of decisively breaking below 113.00 handle amid prevalent risk-off mood, as depicted by weaker trading sentiment surrounding European equity markets.

A fresh leg of downslide in the US Treasury bond yields, during early European session, is also pointing to deteriorating investors’ risk-appetite and boosting the Japanese Yen's safe-haven demand.

Meanwhile, a modest US Dollar recovery from Thursday's one-week low was seen lending some support and limiting any sharp downslide, at least for the time being.

In absence of any major economic releases, broader market risk sentiment would remain an exclusive driver of the pair's price-action on Friday.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet notes, "Wednesday’s failure at the 50-DMA and spinning top candlestick formation followed by a bearish move on Thursday suggests the corrective rally from the Feb 6 low of 111.61 has ended at 114.96 (Feb 15 high)."

He further writes, "the pair could test the support offered by the descending trend line around 112.65 levels. A daily close below 112.65 would open doors for a re-test of the recent low of 111.61. Note - the RSI has failed again to hold above 50.00 levels. A weak price action today would keep RSI below 50.00 for the second day. That would add credence to the bearish price chart. The daily ADX line is sloping downwards again, which indicates the spot could trade sideways in the range of 112.65 and 113.74 today."

AG Markets Review

Friday, 17 Feb, 2017 / 3:36

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