• Having consolidated below 50-hour SMA through the mid-European session, the pair finally broke down of its daily trading range and tumbled to fresh multi-month lows in the last hour.
• The latest leg of a sudden drop over the past hour or so comes after China announced to import tariffs on $60 billion worth of US goods, which boosted the Japanese Yen’s safe-haven status.
Apart from the global flight to safety, possibilities of some short-term trading stops being triggered on a sustained weakness below last week’s swing low – around the 109.50-45 region, further seemed to have aggravated the selling pressure around the major.
Meanwhile, technical indicators on hourly/daily charts are already pointing to near-term oversold conditions and warrant some consolidation/modest bounce, though any attempted recovery might still be seen as an opportunity to initiate fresh bearish positions.
USD/JPY 1-hourly chart