USD/JPY: Chances of lower lows

The USD/JPY pair is trading positively this Wednesday, not far from a daily peak of 110.57. USD/JPY is bearish as long as below 110.65, a Fibonacci resistance level, Valeria Bednarik from FXStreet reports.

Key quotes

“Despite the US government has repeatedly stated that the outbreak is under control in the country, fears of recession and a global economic slowdown hit high-yielding assets in benefit of those considered safe-haven.”

“Japan didn’t release relevant macroeconomic data this Wednesday, while the US will also have a light calendar, as it will only unveil January New Home Sales, seen up 3.5% MoM.”

“USD/JPY is trading around 110.40, consolidating losses below a critical Fibonacci level, the 61.8% retracement of its latest bullish run at 110.65.”

“The upside seems well-limited, as the 20 SMA has extended its slump above the current level, converging with the 50% retracement of the same advance. The 100 SMA provides short-term support around 110.20. Chances of lower lows will increase on a break below this last.”