USD/JPY falls to session low, down by over 1% on the day

The big swings continue in yen crosses this week


But for today, USD/JPY is the most volatile major currency pair as the dollar is seen weakening across the board with Treasury yields giving up some of its overnight advance.

The market is sticking back with risk aversion again today, with US futures down by over 2% while 10-year yields are now down by 13 bps to 0.67%.

As a result, that is helping the yen gain some ground while also weighing on the dollar at the same time – pushing USD/JPY back under 105.00 to a session low of 104.50.

Notably, price is now looking to test a break back under the 100-hour MA (red line) @ 104.65 and a firm break below that will see sellers regain near-term control once again.

In terms of further bearish momentum today, look towards a break below the near-term trendline support @ 104.25. That will open up the path towards testing minor support at 103.22 next before a potential retest of the 102.00 handle.

In the bigger picture, the inability for USD/JPY to keep above 105.00 for a sustained period is not a good sign for buyers considering the risk and economic backdrop.

As the virus outbreak continues to become more widespread and cause further disruption, a move towards the 100.00 level still looks like the path of least resistance – but is encountering some challenges amid global fiscal stimulus for the time being.

Let’s see if there is anything more to the ‘dead cat bounce’ yesterday.