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USD/JPY tumbles along with European stocks, eyes 120

FXStreet (Mumbai) - The Japanese yen was caught by a fresh bid wave versus the US dollar as the European markets opened, knocking-off USD/JPY to fresh session lows ahead of 120 handle.

USD/JPY breaches hourly 200-MA

Currently, the USD/JPY pair trades -0.36% lower at fresh session lows of 120.10, accelerating to the downside on the break of hourly 200-MA. The offered tone around the USD/JPY pair increased this session on the back of increased safe-haven bids for the yen after the major European indices fell back in the red, shrugging off stronger performance of the Asian equities.

The pan-European benchmark, the Euro Stoxx 50, trades -0.59% lower while Germany’s the DAX loses -0.27%. The UK’s benchmark, the FTSE drops -0.60%.

Looking ahead, with no significant economic releases on cards later today, the pair is likely to get influenced by the broader market sentiment.

USD/JPY Technical levels to consider

To the upside, the next resistance is located 120.61 (Today’s High) levels and above which it could extend 121.02 (Sept 17 High). To the downside immediate support might be located at 120 below that at 119.71 (Sept 21 Low) levels.

USD strength pointing towards improving global sentiment – SocGen

Kit Juckes, Research Analyst at Societe Generale, suggests that weakness in Asian/European equities yesterday morning was followed by a US rally, and that in turn took Treasury yields back up and dollar’s status as a funding currency or as a safe-haven currency for that matter is lost. Instead, it’s a barometer of the global mood which, is improving (today, at least).
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EUR/USD off lows as European stocks decline

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