USDJPY Slumps After Weak U.S. Consumer Confidence Data
USDJPY gives up over 80 pips as Japanese Yen safe-haven status re-established amid the recent sell-off in risky assets. The downtrend today accelerated after the disappointment of the consumer confidence data. The US Consumer Confidence Index dropped to 130.7 in February below the expectations of 132. Above that the Richmond Fed Manufacturing Index came in at -2 well below the forecasts of 13 in February.
The USDJPY pair is under heavy selling pressure the last three trading sessions. As of writing has lost over 200 pips since Friday’s high at 112.21.
The Japanese yen was under pressure the last week after the -6.3% annualized contraction of the GDP in the fourth quarter. The market expectations were already low at -3.8% due to the sales tax hike.
On the technical side, the pair’s outlook has turned bearish now after the three days sell-off. We have discussed the previous week the pair has reached overbought levels and a sharp correction can’t be ruled out.
On the downside, immediate support for USDJPY pair stands at 110.06 today’s low while extra bids will emerge at 109.84 the low from February 19. The 50-day moving average at 109.59 will provide the next support zone.
On the flip side the first resistance stands at 111.03 the daily top. Above that the next resistance would be met at 111.67 the high from yesterday’s trading session. The ten-month highs at 112.21 will be the next supply zone.