USD/JPY Current price: 107.55
- Fears prevail, but investors cautious ahead of US employment data.
- Bearish long-term case to steepen on a break below 106.75.
The USD/JPY pair trades below 108.00, at its lowest since April last year, roughly 150 pips below its daily opening, following the market´s crash triggered by Apple Inc. AAPL during the first hours of the Asian session. With Japan on holidays and only New Zealand and Australian markets on the move, the negative news exacerbated currencies reactions across the FX board. Apple issued a warning after Wall Street's close, announcing it now sees first-quarter revenue of $84 billion vs. previous guidance of a range of $89 billion and $93 billion, attributing the cut to weak Chinese sales, collateral damage of the trade war between the US and China.
Safe-haven assets soared, with the USD/JPY falling sub-105.00 before bouncing. The highest level post-collapse is 107.95, achieved after London's opening as, despite the negative mood persists alongside fears of a global economic slowdown, panic receded. The US has a busy macroeconomic calendar today, with multiple minor employment figures scheduled, relevant ahead of Friday's Nonfarm Payroll report. The country will also release the official Manufacturing PMI for December, foreseen at 57.9 vs. 59.3 in November.
The pair currently trades in the 107.50 area, having broken several relevant levels, now resistances, the most interesting being 108.40, the 61.8% retracement of the 2018 rally. Bears will retain control as long as the pair remains below it with approaches to the area probably attracting selling interest. In the 4 hours chart, the pair remains far below its 100 and 200 SMA, while technical indicators resume their declines after a modest upward corrective movement, developing in oversold territory. The main support is 106.75, where the pair bottomed twice after the initial shock.
Support levels: 107.20 106.75 106.30
Resistance levels: 108.00 108.40 108.85
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