USD/JPY tumbles to 112.00, the lowest in a month
- Spot accelerates slide to lowest in a month.
- Lower US yields and a decline in Wall Street added momentum to the yen.
The USD/JPY pair broke below previous lows and accelerated the decline. Recently printed a fresh 1-month low at 111.98. Price remains near the lows, facing a strong bearish pressure.
The greenback was already in trouble from a technical perspective against the yen after the breakout of the 113.00/20 area. The short-term tone started to favor the yen after USD/JPY was unable to rally on top of 114.00/50, suggesting some exhaustion to the upside.
Now the correction is gaining speed. Below the 112.00 handle, the next strong support is seen at 111.60/65 (October lows). To the upside, the greenback needs to recover on top of 113.00 to remove the immediate pressure.
Worst week in months
The combination of technical factors, some risk aversion worldwide, and lower US bond yields, weakened the US Dollar against the yen during the last five days. Not even the US House of Representatives passing the tax reform bill offered a lasting support.
USD/JPY is about to end the week with a decline of almost 150 pips, the worst week since September. For the first time since early August, it will suffer two weekly declines in a row.
The weekly chart shows the next strong support around 111.50/60, an horizontal level and also the 20 and 33 moving averages.