USD/JPY trims losses after hitting lowest since November 2016

USD/JPY bottomed at 108.05 during the American session, the lowest intraday level since November 15. Afterwards it trimmed losses, rising 60 pips from the lows. Near the end of the session, it was trading at 108.65, down 50 pips for the day. The slide was capped at a key resistance around 108.00. 

The yen rose across the board on Thursday boosted by rising US bond. The 10-year yield hit 2.03%, lowest since November before bouncing later to 2.06%. Also, the Japanese currency was favored by a slide of equity prices in Wall Street. The Dow Jones was falling 0.22% after spending most of the day in positive territory. 

The greenback was already moving with a bearish bias in the market and accelerated the move down after the European Central Bank meeting and also following the US jobless claims reports that showed a sharp increase to the highest since 2015 (numbers were affected by Hurricane Harvey). 

Technical outlook 

The risk remains to the downside despite the 50 pips recovery affirms Valeria Bednarik, Chief Analyst at FXStreet. “There are no signs of a bottom, as in the 4 hours chart, the price is further below bearish 100 and 200 SMAs, whilst the Momentum indicator has turned flat within negative territory, and the RSI indicator barely bounced from oversold readings.”

According to her, another round of selling that sends the pair below 108.10 “should lead to a new leg lower, towards the 107.30/70 region.”