August 05, 2024 at 05:23AM
The pair has just hit the lows for the day at 143.55, threatening an over 2% drop today alone already. This comes as traders are sticking with the flight to safety as markets have gone into full blown panic mode. It’s a bloodbath in the equities space with the Nikkei down over 7% currently, with S&P 500 futures down 1.6% and Nasdaq futures down 2.9% on the day.
In the bond market, 10-year yields in the US are at their lowest since July last year – now seen at 3.76%. For some context, it’s down over 50 bps in just a little under two weeks. And that’s a contributing factor driving the downside in USD/JPY.
In times like this, it’s all about the emotion in markets. The selling will stop when it stops. There’s no point in trying to be a hero and pick a bottom. As the saying goes, never catch a falling knife.
From a technical perspective though, there is little stopping USD/JPY from a further decline towards its end-December low of 140.25. That and the 140.00 mark will be key levels to watch on the charts as traders continue to digest broader market sentiment to start the new week.
This article was written by Justin Low at www.forexlive.com.
