USD/JPY: Bearish specs re-engage, target 100.00 big focus

USD/JPY has resumed its downtrend violently off 101.30 resistance zone, falling over 50 pips towards a new session low of 100.80, with currently no news being attributed to the move, which suggests speculative flows are behind the current downmove.

Perfect bearish storm for an attack towards 100.00

Fundamentally, a perfect bear storm has hit the pair, as the market prices out further rate hikes by the Fed following a big US GDP miss in Q2, which adds to the relatively cautious rhetoric by the latest FOMC statement. On top of that, both the latest BOJ policy decision as well as the recently approved Japan's ¥28 trillion stimulus package fell short of market expectations, resulting in yet more reasons for specs to engage on a fresh Yen buy campaign.

USD/JPY technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes: " With the pair having extended well below the 61.8% retracement of its latest rally, speculative interest is now targeting 99.98, July 8th low, although with a cautious stance, as nobody knows how the BOJ will react to the pair breaking through 100.00."

Omkar Godbole, Editor and Analyst at FXStreet, notes: "It is only a matter of time before the pair has a re look at 100.00 levels. Friday’s payrolls report could provide a temporary lift, that too if the Fed rate hike bets pop following the data release. A break below 100.71 could yield another wave of selling for 100.00 levels."

What price levels and patterns have to be considered?

Next resistance can be seen at 100.90 (Daily Open), 100.90 (Weekly Low), 101.26 (Hourly 20 EMA), 101.40 (Daily High) and 101.48 (Daily Classic PP). Support below can be found at 100.82 (Daily Low), 100.68 (Yesterday's Low), 100.53 (Monthly Low), 100.53 (Annual Low) and 100.53 (YTD Low).