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Jun 18 - 11:55 AM

USD/JPY - COMMENT-June Low At Risk As US Jobless Claims Hasten USD/JPY Fall

By Randolph Donney  —  Jun 18 - 10:00 AM

USD/JPY fell toward June's 106.58 low on rising risk aversion and narrowing Treasury-JGB yield spreads in the wake of disappointing U.S. jobless claims data [nAQN02OYGWnZON000JHL.
The data echoed Fed warnings of a protracted economic recovery from pandemic losses nW1N26P029, while risks of a deeper USD/JPY slide increased.
Unexpectedly positive Philly Fed data nZON000JHL offset the claims somewhat, but geopolitical and COVID-19 concerns overshadowed markets.
If USD/JPY breaks June's low and the daily cloud base at 106.45 the next targets will be May's 105.985 EBS low and the lower 21-day Bolli, now at 105.95.
Downside risks were enhanced by the session high coming below the cloud top at 107.20 and the 21-DMA trending lower.
Along with lingering pandemic problems, geopolitical tensions have been rising.
There was also a fight over digital taxes nL8N2DV11N heating up and U.S. President Trump nL1N2DU1ZD and Prime Minister Abe nL4N2DT1RN were dealing with issues that could impact their re-election prospects.
Traders' shift into the haven yen on the growing uncertainty left it better bid than the dollar.
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Source:
Refinitiv IFR Research/Market Commentary

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