USDJPY accelerates through key 110 support zone on fresh risk aversion
The USDJPY accelerated sharply lower in early European trading on Thursday, deflated by fresh risk aversion, mainly driven by a sharp fall in China’s government bond yields after authorities announced cuts in banks’ mandatory reserves in order to keep monetary policy stable, which investors took as a strong easing signal.
Fresh weakness probes through pivotal 110 support zone (bull-trendline off 107.47 low / Fibo 38.2% of 107.47/111.65 / psychological), with daily close below these levels to generate strong bearish signal.
Rising 55DMA offers support at 109.65, with stronger acceleration to risk test of 109.13/07 (100DMA / Fibo 61.8%).
Daily chart studies are gaining negative momentum and support the action, but oversold stochastic may provide headwinds and slow bears.
Solid resistances at 110.60 zone (broken 20DMA / session high) should cap extended upticks and keep fresh bears in play.
Res: 110.06; 110.16; 110.60; 110.76
Sup: 109.65; 109.31; 109.07; 108.72