Yen record highs last few weeks against the dollar and the euro, extending gains for a second session as investors sought safety in the Japanese currency, as US data released overnight weakened and growing uncertainty over the future of Greece in the euro zone if left-wing parties Syriza win the elections due to be held later this month.
Moreover, the fear by continually weakening in oil prices and the prospect of deflation in Europe, investors sold stocks and stormed government bonds. US T-Bill yield on 10-year-old fell back below 2 percent, while the German bond yields slid to a record low of 0.442 percent. The decline in US yields give investors the green light to sell the dollar / yen, pushing the greenback to 118.04 yen for the first time since mid-December.
Currently, the pair, rebound and penetrate retracement level of 38.2 percent to as high as 119.17 due to bargain hunting. And when viewed from the average daily motion, USDJPY has the potential to reach an intraday high of 119.20 range. But beware of retail sales (1.9% frcst.0.0% vs. prev) and unemployment change (frcst. -6K Vs. -14K) from Germany, as well as the initial inflation (0.1% vs. frcst.-0.3 prev.) Of the Eurozone are pessimistic potentially hurt risk appetite and withdraw USDJPY back to 118.30 late again.
Here is the level of support and Resistance for USDJPY this morning;
Support: 118.63 – 118.34 – 118.04
Resistance: 119.15 – 119.50 – 120.79