Technical Developments:

• USD/JPY remains severely pressured as the dollar weakens on low Fed rate hike expectations and the safe haven yen surges on continued stock market volatility. Technical bias: Bearish
• GBP/USD has lost upside momentum within the context of its recent rally, and could be poised to resume its bearish stance. Technical bias: Neutral to Moderately Bearish
• USD/CAD has bounced modestly after pulling back to February lows, and could resume its uptrend on continued weakness in crude oil. Technical bias: Neutral to Moderately Bullish
• EUR/USD has surged on a severely weakened US dollar, and could have further to run as economic concerns increasingly preclude another Fed rate hike. Technical bias: Moderately Bullish

USD/JPY

During most of the past week, USD/JPY continued its steep plunge as diminished expectations of further interest rate hikes by the U.S. Federal Reserve weighed on the dollar, and turbulent stock markets around the world pushed up the safe haven Japanese yen. This resulted in swift breakdowns below successively lower support levels this past week, including the key 116.00 and 114.00 levels.

Pressure on the dollar due to diminished expectations of future Fed monetary tightening is not likely to abate in the very near future. Likewise, heightened fear and volatility in the struggling global equity markets appear likely to remain for the time being, which should further prop up the Japanese yen. For USD/JPY, this means that the recent plunge could potentially be extended.

Having reached down this past week to touch a new 15-month low slightly below 111.00, USD/JPY has seen an acceleration of its bearish momentum and could now be poised to target further downside objectives at the key 110.00 and 108.00 support levels.

Source: FOREX.com