G10 currencies were steamrolled by the Japanese Yen on Thursday as renewed US-China trade concerns accelerated the flight to safety.
The USDJPY tumbled more than 0.7% to a fresh two week low at 108.05 thanks to the risk-off sentiment. Given how the market mood is likely to remain negative on trade uncertainty and global growth concerns, the Yen is positioned to extend gains against its major counterparts.
In regards to the technical picture, prices are under pressure on the daily charts. A solid breakdown below 108.00 should open the gates towards 107.50 and 106.90, respectively. Should 108.00 prove to be a reliable support level, the USDJPY could rebound towards 108.40.
GBPJPY dips below 140.00 on rising risk aversion
Sterling has weakened against the Yen thanks to the general risk-off mood and Brexit related uncertainty.
The GBPJPY could turn bearish on the daily charts if prices drop below the 139.00 support level. Technical traders will continue to closely observe how the currency pair behaves around the 140.00 – 139.00 regions. Sustained weakness below 139.00 should open a path towards 137.50.
EURJPY balances above 120.30
There is a classical breakout opportunity in play on the EURJPY with prices trading marginally above the 120.30 support level as of writing.
If bulls are unable to defend this level, prices are seen challenging 119.60 and possibly lower. Alternately, a rebound from the 120.30 level will encourage an incline higher towards 121.50. For bulls to jump back into the game, prices need to secure a solid daily close above 121.50 with 122.20 acting as the next key level of interest.
Commodity spotlight – Gold
Gold prices have blasted above the $1510 level today following reports that China was growing increasingly doubtful it can reach a trade agreement with the United States.
The risk-off sentiment should propel prices higher ahead of the US jobs report on Friday. Focusing on the technical picture, bulls are back in the driving seat with prices trading around $1511 as of writing. A solid daily close above $1510 should encourage a move towards $1515 and $1525, respectively.
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