USD / JPY sinks for the second day in a row and is approaching 103.00

• USD / JPY falls to fresh eight-month lows at 103.15.
• The post-election rally causes the US dollar to fall.
• The USD could accelerate its downtrend below 103.07.

The U.S. dollar it extended its downtrend against the Japanese yen on Friday to hit fresh eight-month lows at 103.15. The dollar has been affected by the rebound in risk after the US elections.

US dollar sinks as equity markets rise

USD / JPY is on track for a 1.15% depreciation this week, with equity markets posting their best weekly performance since April. The prospects of a Democratic government with a divided Congress in which Republicans can block initiatives to increase taxes or introduce stricter regulations have been welcomed by investors with a spike in risk, sending the dollar as a safe haven to lows of several months against their main rivals.

On the macroeconomic side, the upbeat Non-Farm Payroll report triggered an intraday bullish reaction, pushing the pair to 103.80, although the general bearish bias prevailed, and the dollar returned near session lows.

According to the Labor Department, US private payrolls rose by 638,000 in October, beating market expectations of a 600,000 increase. Likewise, the unemployment level fell to 6.9% from 7.9% well beyond the expected reading of 7.7%.

USD accelerates its decline below 103.07

From a technical standpoint, FXStreet Chief Analyst Valeria Bednarik sees that the pair will likely accelerate its downtrend below 103.07: “The 4-hour chart shows that the USD / JPY continues to slide below all its moving averages, with the 20 SMA accelerating south below the longer ones. Technical indicators, meanwhile, resumed their declines after a modest corrective advance, again at oversold levels. The March 12 daily low at 103.07 is the immediate support level, and further declines are expected on a break below it. ”