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USD/JPY extends correction to 123.00

FXStreet (Córdoba) - USD/JPY bounced to the downside after being unable to hold above 123.50. Initially dropped to Friday’s closing price at 123.20 and then dropped further hitting a fresh daily low 122.95. Currently is hovering around 123.00, falling for the first time after rising during the previous five trading days.

Stocks are falling sharply in Wall Street. The Dow Jones is losing 1.25% and the Nasdaq declines 1.32%. Despite the decline in equities, US bond yields are rising.

Risk aversion favored the yen in the market; it gained momentum and trimmed loses versus the Pound and the Euro while it printed new highs against commodity currencies.

USD/JPY: just a correction

So far, today’s decline should be considered a bearish correction. Last week it gained almost 300 pips and broke medium term resistance levels. Technical indicators show overbought conditions favoring a correction, but as long as the price remains above 121.70 – 122.00, the outlook is likely to continue to favor the upside.

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