FXstreet.com (Barcelona) - After falling around 100 pips from intra-day high at 89.05 in the early Asian session to post 88.00 as fresh 8-month low during the European morning, USD/JPY has bounced at this level to trade close to 88.80 level ahead the US opening bell.
Currently the pair is trading around 88.75/85 after recovering all of previous losses and reaching 0.05% daily gains from opening price action at 88.75.
TJ Marta, analyst at The Overnight Express, comments: Tested a new low. USD/JPY (88.35) is down overnight, with the cross testing a new low since Jan. Support now lies at 88.01 (Oct 7 low) and then 87.13 (Jan '09 low). Resistance lies at 90.44 (downtrend off Aug high), 92.53 (Sep 21 high) and 93.30 (Sep 7 high). The correlations of USD/JPY with the U.S. 10yr yield and U.S.-JP 10yr spread remain strongly significant but are slipping.
According to Nicole Elliott senior technical analyst at Mizuho Corporate Bank, the Dollar is on its way to test 87.10 and 85.00 support levels: Consolidation under trendline resistance with the 9-day moving average pushing prices lower. The US dollar is slightly oversold and bearish momentum has increased. A test of this year's low at 87.10, and then critical long term support at 85.00, is imminent.