USD/JPY sees aggressive selling, eyes 108.00 as risk-off intensifies

12 Jun 2019

  • Renewed weakness in S&P 500 futures and Treasury yields knocks-off USD/JPY.
  • Risk-off in vogue amid fresh US-China trade worries following Trump’s tweets.
  • All eyes on US CPI and trade-related news for fresh impetus.

The USD/JPY pair witnessed a 20-pips drop over the last hour, as the buying interest gathered pace around the safe-haven Yen, with the European traders hitting their desks and reacting to the renewed worries over the US-China trade spat.

Risk-off remains at full steam heading into the European open, as markets remain jittery after the US President Trump took a tough stance on China, citing that he had no interest in moving ahead unless Beijing agrees again to four or five "major points".

Further, the sentiment also received a fresh blow following the latest report citing sources that the expectations for progress toward ending the trade war from the upcoming Trump-XI meeting are low.

Amid intensifying risk-aversion, the spot tracked a fresh round of selling in the S&P 500 futures and Treasury yields and hit fresh three-day lows at 108.31. In the day ahead, the risks remain skewed towards a test of the 108 handle, as suggested by the technical set up.

“The spot charted back-to-back daily candles with long upper shadows. A candle with a long upper shadow is considered a sign of buyer exhaustion. A break below 108.31 (Monday’s low) today would validate the buyer exhaustion near 108.80 signaled by the daily candles with long upper shadows and could yield a drop to fresh 2019 lows below 107.81,” FXStreet’s Analyst, Omkar Godbole, notes.

The focus now shifts towards the US CPI report for the month of May, with the headline figures likely to soften while the US-China trade-related headlines will continue to influence the major.

Technical levels to watch


Trading foreign exchange on margin carries high potential rewards but also high potential risks that may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience and risk appetite. Past performance is not indicative of future results, which can vary due to market volatility. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

Any opinions, news, research, analyses, prices or other information contained on this website or linked to from this website are provided as general market commentary and do not constitute investment advice. AUSFOREX does not accept liability for any loss or damage, including any loss or profit, which may arise directly or indirectly from use of or reliance on such information.

Register a Demo Account

Test drive our trading platform with a 30 day free trial

Register a Live Account

Get started.Open a Forex and CFD trading account with AUSFOREX now

Deposit Funds

Express way for deposit funds

Live Chat

Chat live with one of our 7*24 hour multilingual customer service team