USD/JPY hits fresh session low amid global risk-aversion

The USD/JPY pair remained suppressed below 50-day SMA and has now dropped back to the lower end of daily trading range.

Currently trading at 102.10, global risk-aversion mood is driving investors to the perceived safety of the Japanese Yen. However, reviving hopes of a Fed rate-hike in September, after Friday's hawkish comments from FOMC member Eric Rosengren on Friday has so far limited further downside for the major. 

Expectations about the Fed's next monetary policy move would continue to dominate traders’ sentiment on Monday as markets now look forward to a scheduled speech from the Fed Governor Lael Brainard, who is considered as one of the most dovish FOMC members.

A further hawkish rhetoric by yet another FOMC member would revalidate market expectations that the Fed would raise interest rates at its meeting on September 20-21 and would be highly supportive for the greenback in the near-term.

Meanwhile, an empty economic docket is unlikely to provide any fresh impetus and trades might continue to drive the pair based on the prevalent risk sentiment in equity markets and Fed rate-hike expectations. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "From a technical point of view, the daily chart shows that the price continues developing well below a bearish 100 DMA, currently at 104.30, while the RSI indicator heads modestly higher around 53 and the Momentum indicator consolidates within bullish territory. In the 4 hours chart, the price is above the 100 and 200 SMAs, both around 101.80, while technical indicators have turned horizontal well above their mid-lines. Overall, the bearish potential seems limited in the short term, but it will take an advance beyond 103.00/10 to see the pair posting some additional gains this Monday, up to 104.31, last week high."

"Support levels: 102.50 102.10 101.80
Resistance levels: 103.05 103.50 103.95"