USD / JPY falls to five-day lows and approaches 109.00

  • Yen favored by decline in yields and fall in stock markets.
  • The dollar with mixed results, gains moment in the last minute.

The USD / JPY is rebounding, cutting losses after falling to 109.06, the lowest level since May 12. The price is around 109.20, in negative territory for the day, although moving away from the minimum, given a recovery of the dollar in the market.

The greenback presents mixed results. In the past hour, the DXY passed a five-day low near 90.10 and rose to 90.30 recently, erasing losses. At the same time, Treasury yields rebounded. The 10-year rate had fallen hours ago to 1.60% and is now back above 1.63%.

The yen in the last hour gained momentum before an extension of the fall of Wall Street futures. The main indices point to a negative opening with losses around 0.45% on average.

On Sunday in Japan, the state of emergency began to apply in Tokyo, Hiroshima, Okayama, and Hokkaido until the end of the month, to reduce the rate of COVID infections. The economic calendar shows for Monday the Empire Manufacturing report and the NAHB Manufacturing Sector Index. In addition, several officials from the Federal Reserve (Clarida, Bostic and Kaplan) will speak. In Japan the first quarter GDP growth report will be released on Tuesday.

Strong support at 109.05

In case of extending the losses, the USD / JPY will face a strong support around 109.00 / 05, which if it gives way, would generate more weakness in the dollar. To the upside, a recovery of 109.50 would ease the pressure to the downside, while then at 109.75 / 80, there is the next relevant resistance.

Technical levels

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