The pair spiked to new multi-month low in early Asian trading on Thursday, in ‘flash crash’ triggered by Apple’s unexpected quarterly sales forecast for China, which added to concerns about global growth.
Further strength of safe-haven Japanese yen, in strong risk aversion environment was helped by thin holiday volumes, as Japan is still on New Year holiday.
Overnight’s spike accelerated after triggering a number of stops and cracked 2018 low at 104.63, but losses were short-lived and subsequent bounce returned to the levels near 108 mark in early European trading.
Near-term outlook remains negative, as the pair holds in red for the fifth straight day, with bearish daily techs supporting scenario.
Strong rejection at key 104.63 support and daily slow stochastic reversing from oversold territory, suggest that bears may consolidate before fresh attack at 104.63 pivot.
Daily Tenkan-sen in steep fall, which caps for now today’s action, marks initial resistance at 108.89 and guards other pivotal barriers at 110.00 (psychological) and 110.42 (falling 10SMA), with selling upticks scenario remaining favored while these barriers cap.
Res: 109.58, 110.00, 110.26, 110.76
Sup: 108.90, 108.41, 108.11, 106.97
