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USD/JPY recovers above 109 as DXY gains traction

  • Risk-aversion boosts demand for JPY on Wednesday.
  • US Dollar Index pushes above 96.50.
  • Coming up: Markit Manufacturing PMI from the U.S.

Dragged by plummeting U.S. Treasury bond yields, the USD/JPY pair touched its lowest level since May of 2018 at 108.70 before staging a modest recovery ahead of the beginning of the NA session. As of writing, the pair was trading at 109.12, still losing 0.53% on a daily basis.

A decisive correction seen in the US Dollar Index in the last couple of hours points to a broadly stronger greenback, which allowed the pair to reverse its course. Ahead of the IHS Markit's December final Manufacturing PMI report, the DXY is adding more than 0.6% on the day at 96.70. Although there were no clear catalysts that could have impacted the greenback's market valuation, major European currencies', namely the GBP and the euro, dismal performance seems to be boosting the demand for the buck.

Meanwhile, major equity indexes in the U.S. point to a weak start to the day with the S&P 500 futures losing more than 1.5% in pre-market trading. A heavy sell-off in the U.S. stocks could offset the USD strength make it difficult for the pair to extend its recovery in the second half of the day.

Technical levels to consider

USD/JPY

Overview:
    Today Last Price: 109.1
    Today Daily change: -65 pips
    Today Daily change %: -0.592%
    Today Daily Open: 109.75
Trends:
    Previous Daily SMA20: 111.92
    Previous Daily SMA50: 112.67
    Previous Daily SMA100: 112.35
    Previous Daily SMA200: 111.06
Levels:
    Previous Daily High: 109.87
    Previous Daily Low: 109.57
    Previous Weekly High: 111.41
    Previous Weekly Low: 110
    Previous Monthly High: 113.83
    Previous Monthly Low: 109.55
    Previous Daily Fibonacci 38.2%: 109.75
    Previous Daily Fibonacci 61.8%: 109.68
    Previous Daily Pivot Point S1: 109.59
    Previous Daily Pivot Point S2: 109.42
    Previous Daily Pivot Point S3: 109.28
    Previous Daily Pivot Point R1: 109.89
    Previous Daily Pivot Point R2: 110.03
    Previous Daily Pivot Point R3: 110.19

 

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