USD/JPY drops below 111 as USD sell-off continues

Jan 13, 2018
11
0
6
53
After rising to a daily high at 111.70 during the early trading hours of the American session, the [URL deleted] USD/JPY pair lost more than 70 pips and broke below the 11 mark to refresh its lowest level since late November at 110.91. As of writing, the pair was trading at 110.95, losing 30 pips, or 0.27%, on the day.

Earlier this week, the BoJ's announcement of a reduction in bond-buying allowed the JPY to gather strength against the USD and other major currencies as well. In fact, despite the Euro Index's strong performance this week, the EUR/JPY pair is looking to close the week lower.

On the other hand, following the technical correction witnessed during the first half of the week, the US [URL deleted] Dollar Index once again, reversed course and broke below the critical 91 mark to renew its lowest level since January 2015 at 90.71. Despite a slightly higher-than-expected core-CPI reading from the U.S. on Friday, the DXY failed to make a meaningful recovery as investors remained focused on the euro, which rose to its strongest level against the buck in more than three years.

On a weekly basis, the pair is losing more than 200 pips, its largest loss since the first week of April. However, with technical indicators showing oversold conditions on various time frames and the odds of the [URL deleted] Fed making at least three more rate hikes in 2018, the pair could have a difficult time pushing lower in the near-term.
 
Last edited by a moderator: