USD/JPY Price Analysis: Off lows, but gap remains unfilled

• USD/JPY gapped lower in Asia due to risk aversion. 
• The pair has trimmed losses but is yet to fill the gap. 
• A move to 109.17 is needed to fill the gap down open.

USD/JPY has recovered part of early loss, but the gap created by the pair's open weekly open rate of 108.89 is still unfilled. 

The pair gapped lower at 108.89 in Asia from Friday's low of 109.17 and fell to 108.73, as the anti-risk yen picked up a bid on a string of bad news, ranging from Coronavirus scare to attack on the US embassy in Baghdad. 

USD/JPY has bounced up slightly from session lows. At press time, the pair is trading at 108.94, however, the 28-pip gap still remains unfilled. 

Markets tend to fill gaps, so, a move to 109.17 cannot be ruled out. That said, a bounce to that level could be short-lived or remain elusive if the risk-off mood worsens. Currently, the futures on the S&P 500 are reporting  0.90% drop, while sticks in Asia are flashing red amid a 2.3% decline in oil prices.

USD/JPY risks falling to support at 108.43 (Dec. 9 low) on sustained risk aversion. A violation there would expose 107.89 (Nov. 1 low). 

Hourly chart

Trend: Bearish

Technical levels