USD/JPY hits 2-week lows under 107.00 and rebounds

• Yen gains ground across the board amid risk aversion. 
• USD/JPY founds support at 107.00 and trims losses, still under pressure. 

The USD/JPY accelerated the slide from daily highs and bottomed at 106.98, the lowest level since September 9. From the lows, it bounced and currently trades at 107.35. The move off lows took place after US President Trump announced he authorized the release tomorrow of the “complete, fully declassified and unredacted transcript” of the phone conversation with Ukrainian President Zelensky. 

Previously data from the US (a decline in consumer confidence) and Trump’s speech at the United Nations General Assembly weight on market sentiment.  "The WTO needs drastic change given China's actions on trade,” he said. Equity prices tumbled, and the 10-year US yield fell to 1.649%, the lowest since September 10.  In Wall Street, the DOW JONES is off lows,  losing 0.35 while the NASDAQ tumbles 1.05%.

Meetings around the UN General Assembly and also headlines around the possibility of Trump’s impeachment continue to drive volatility around markets. 

Levels to watch 

The USD/JPY is off lows, but the bearish momentum still prevails. A recovery above 107.70 (20-SMA in four hours chart) would change the short-term tone favoring a recovery toward 108.00. The next resistance level is seen at 108.10. 

On the flip side, if USD/JPY fails to hold above 107.35, the negative tone will prevail. The  107.00 area has become an essential short-term support; a break lower would leave the pair vulnerable to a slide toward 106.60/65.