USD/JPY: risk off mode extended, UK terror attack fuels the downside
Currently, USD/JPY is trading at 111.02, down -0.28% on the day, having posted a daily high at 111.36 and low at 110.86.
USD/JPY has seen a significant sell-off on the back of the developments in Manchester UK where a huge explosion at the end of a concert is being treated as a sinister innocent. The scale of injuries has sparked a belief that this was a bomb and a serious terror attack. 19 fatalities have been reported. USD/JPY dropped from 111.34 down to 110.85 the low so far.
- UK officials suspect Manchester blast was caused by suicide bomber – NBC news
Elsewhere, the dollar has otherwise been on the backfoot in a continuation of the positions being unwound as investor concerns over the US economy and politics mount.
- Dollar slumps on heightened political uncertainty
The DXY lost the 97 handle overnight while US 10-years remained in negative territory sitting around 2.2345%. Eyes will now turn to US data in the form of New home sales. The risk aversion tone will continue to support the yen.
USD/JPY levels
USD/JPY's nearby support was eroded and the market is on the defensive. Analysts at Commerzbank argue that USD/JPY last week eroded support offered by the previous downtrend and the cloud and sold off aggressively and that it will shortly encounter the 109.83 200 day ma and this guards the 108.13 April low. "We look for near term rebounds to remain capped by the 112.00/45 range. Rallies will need to regain 112.45 to retarget the 114.38 recent high."