USD/JPY erases gains and approaches 110.30
- US Dollar heads for the seventh consecutive daily decline.
- USD/JPY fails to hold to gains as yen strengthens on Wall Street and USD slide.
The USD/JPY pair spent most of the day in positive territory but during the second half of the American session the greenback weakened and the yen gained momentum as equity prices in Wall Street turned lower.
The US dollar failed to hold to gains and dropped into negative territory. Still was able to hold on top of yesterday’s low but price was moving close to the 110.30/35 area.
USD/JPY peaked during the Asian session slightly below 111.00 following comments from Japanese Finance Minister Taro Aso that warned about the moves in the currency market referring to yen’s recent appreciation.
The pair found resistance below 111.00 and pulled back. Then it moved sideways as greenback consolidated modest gains across the board until late into the US session when it broke to the downside. Recently bottomed at 110.40 and it was back into negative territory, extending the negative streak.
Technical outlook
“Technically, and according to the 4 hours chart, the pair remains biased lower, as the 100 SMA extended its bearish slope below the 200 SMA and both far above the current level, while technical indicators hover within negative territory after correcting oversold conditions”, said Valeria Bednarik, Chief Analyst at FXStreet.
This week low at 110.32 is the support to break to confirm another leg lower warns Bednarik. She places the next support levels at 109.85 and 109.40.