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USD/JPY drops towards key 200 DMA support below 111 handle

  • USD/JPY and yen crosses drop on the open in Asia today following the worst performance on Wall Street last week in a decade as political and economic risks swell up into the holiday season. 
  • USD/JPY ended the NY session on the back foot at 111.22, opening at 111.02 today with a score below the 111 handle for a low, so far, of 110.99.

USD/JPY has opened on the offer in thin holiday markets without a bid which may result in further slides in the upcoming sessions ahead before traders head off from Christmas Eve celebrations in most financial centres. Tokyo is closed today but the Europeans and US markets will be open, albeit with far less liquidity and an unwillingness to trade the pair in volume. 

  • Forex today: Dollar and Yen attract safe haven flows, Wall Street down 2% as political and economic risks mount

Outlook leaning bearish

The fundamentals are stacking up in the bear's favour with the market observing a far less hawkish Fed and a flight to safety as global stocks extending the downside. Due to both economic and political worries, the S&P 500 is now well below February breakdown lows and the Dow and Nasdaq are still weighed down with the Apple-led drag from the FAANGs amid concerning signs regarding the U.S.-China trade relations. 

  • The United States Economy and Politics in 2019

USD/JPY levels

USD/JPY had accelerated lower through the 112.23 6th December low and has already sold off to the 200-day ma at 110.91. "Failure here will target 109.77, the August low," analysts at Commerzbank argued. "If the 109.77 August low were to give way, the June 8 low at 109.20 would be in focus. Failure there would imply a slide back to the 108.12 May 29 low and the mid- February high at 107.91."

Forex today: Dollar and Yen attract safe haven flows, Wall Street down 2% as political and economic risks mount

The market is facing the U.S indictments of Chinese on cybercrimes which dim the outlook for the trade tariffs truce that ends March 1, lingering conc
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