USD/JPY PRICE FORECAST: US DOLLAR PLUNGES AGAINST YEN AS WEEKLY JOBLESS CLAIMS EXPLODE ON CORONAVIRUS FALLOUT
- USD/JPY slipped more than 200-pips from Wednesday’s high as the US Dollar starts to give back recent gains
- US Dollar weakness gained pace following the jaw-dropping 3.3 million rise in weekly jobless claims amid the coronavirus lockdown
- Spot USD/JPY price action now testing confluent support around the 110.00 handle
I noted on Tuesday that the US Dollar was beginning to come under pressure as FX volatility ebbs and the FOMC ramps up liquidity efforts. Downside in the US Dollar has since accelerated relative to after historic jobless claims data exploded off the charts. US Dollar weakness was witnessed particularly in USD/JPY as the Yen gains ground – perhaps due to its status as a safe-haven currency.
| Change in | Longs | Shorts | OI |
| Daily | -2% | -6% | -4% |
| Weekly | -15% | 98% | 30% |
USD/JPY PRICE CHART: 4-HOUR TIME FRAME (FEBRUARY 17 TO MARCH 26, 2020)
USD/JPY is now down roughly 200-pips since the intraday high printed during the prior trading session, but spot prices now test technical support roughly around the 110.00 level. This area of confluence is underscored by the 76.4% Fibonacci retracement of the year-to-date range recorded by USD/JPY.
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Also, buoyancy may be provided to spot USD/JPY price action by the bottom barrier of its Bollinger Band. The 50-EMA might offer a degree of technical support as well. If the March 20 intraday low gives way, however, USD/JPY could continue to edge lower toward the 108.00 handle.
— Written by Rich Dvorak, Junior Analyst for DailyFX.com
Connect with @RichDvorakFX on Twitter for real-time market insight
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