USD/JPY hits fresh lows under 113.00

The yen gained momentum during the American session across the board and particularity versus the US dollar as equity prices extended losses and US bond yields decline. 

A deterioration in market sentiment took place during the last hours. The Dow Jones was falling 0.31% while the Nasdaq was losing 0.33%. The 10-year yield fell to 2.40%, the lowest since last Tuesday.  Investors continue to analyze recent statements from US President Donald Trump. He said he is going to cut taxes massively and also create border tax. 

USD/JPY reversed sharply after reaching levels on top of 114.00 and dropped more than a hundred pips, breaking below previous daily lows. The pair bottomed at 112.94 and it was trading at 113.05/10, 150 pips below Friday’s closing price. 

Levels to watch

The greenback continues under pressure against the Japanese currency. Price holds inside a bearish channel. A consolidation around current levels would leave the 112.50 area (last week lows) exposed. Below that level, the next target could be seen around 111.40, horizontal support and the lower limit of the mentioned downward channel. 

To the upside, above 114.40, the US dollar could remove bearish pressure, but in order to gain support for a stronger recovery, it needs to rise above 115.15/20 (upper limit of the channel).