USD/JPY reverse gears as tech stocks dropped

• Bears have taken the lead on US technology stocks. 
• The USD/JPY erases its gains made on Tuesday. 

The USD/JPY is trading at around 105.40 ending the day virtually unchanged as risk-off mode has kicked back in while a new wave of selling has hit US stocks apparently lead by technology companies being hit the most. 

Facebook dropped 4.2%, one of its worst loss since July, Nvidia was down 6.9% while Tesla plummeted more than 8% and Twitter plunged not less than 11%. Apple held up the best as it only lost 1.8%.

The potential for a 30% correction is looming with factors such as widening credit loans and fiscal deficit in the US, uncertainties over the infrastructure spending plans compounded by a potential trade war. According to Steen Jakobsen from Saxo Bank. 

USD/JPY 1-hour chart

The USD/JPY started the day with bullish momentum but the shift in sentiment in Wallstreet saw the USD/JPY pair pullback to the 105.40 level at the 50 and 100-period simple moving average, where it has found support for the time being. However, the USD/JPY remain vulnerable to downside risk as investors might be shifting into risk-off mode and buy the Yen as safe-heaven. Support is seen at the 105.00 handle previous swing low; followed by 104.60 low. On the flip side resistance is seen at 105.80, close to the high of the day and the 200-period SMA on the 1-hour chart; followed by 106.60 previous swing high.