Will 107.00 Hold in the USD/JPY?
Rowan Crosby • 1 min read
Markets have started to look a little shaky in the last 24-hours as jitters in the US and other key global markets is seeing a bit of a spark in the risk-off trade.
As a result, the USD/JPY has been gradually edging lower, with buyers coming into the JPY. As it stands, price is at a key inflection point with only the 107.00 level standing in the way of a bit of drop off.
Overnight, we saw a few negative headlines that really hurt worldwide sentiment. The first was that the ADP employment number was a little softer than expected.
The monthly print came in at 135K which was only just under the predicted number, however, the prior month was revised lower by nearly 50K jobs.
That doesn’t bode well for this Friday’s offical NFP release which could spell trouble for the likes of the the SPX.
At the same time, the WTO will allow the US to impose $US7.5 billion in tariffs on European imports as a penalty for EU subsidies for aircraft maker Airbus. This is opening up a whole can of worms, which means more US tariffs are on the way.
Rightly or wrongly, it saw stocks dump sharply and safe-haven’s strengthen.
So in terms of the USD/JPY, there is a real risk or more downside here.
Price was unable to break 108.00 and formed somewhat of a double top. If the 107.00 breaks, then I think we will see some sharp selling coming back into this pair.
My downside target will be at least 106.00 and I think this gives us a great opportunity