USD/JPY tumbles and drops more than 100 pips on Russiagate

• USD drops dramatically after media reports that Flynn will testify against Trump. 
• US bonds jump, equities tumble. 
• USD/JPY losses a hundred pips in minutes. 

The USD/JPY pair lost more than a hundred pips in a few minutes following reports that former national security adviser Michael Flynn was ready to testify that Donald Trump directed him to contact the Russians. 

The greenback plummeted across the board. USD/JPY fell from 2-week highs above 112.70 to 113.40, in the biggest one-hour move in weeks. Price was holding near the lows with the US Dollar under pressure. 

The yen gained momentum supported by a rally in US bonds and also by a sharp decline in equity prices. The Dow Jones was near all-time highs at 24,300 and dropped below 24,000. 

Levels to watch 

USD/JPY lost weekly gains in minutes and the momentum changed dramatically. From testing a key resistance now seems vulnerable for another test of November lows. 

To the downside, the next support might lie at 111.30 (Nov 29 low), followed by 111.00/05 (Nov 23 low) and 110.80 (weekly low). To the upside, resistance might now be seen at 111.70 (Nov 30 low), 112.00 and 112.80.