USD/JPY slides farther below 109.00 mark, fresh 3-week lows
• Risk-off mood underpinning JPY’s safe-haven demand and prompts some fresh selling.
• Sliding US bond yields weigh on the USD weakness and add to the downward pressure.
The USD/JPY pair remained under some intense selling pressure on Tuesday and weakened farther below the 109.00 handle, to over 3-week lows.
The ongoing political turmoil in Italy offset renewed optimism over the US-North Korea summit and underpinned the Japanese Yen's safe-haven appeal.
This coupled with sliding US Treasury bond yields, which prompted some US Dollar weakness, further collaborated to the pair's downfall to its lowest level since May 8th.
With today's slide, the pair has now reversed nearly 100-pips from yesterday's swing high level of 109.83 and a follow-through weakness, led by some fresh technical selling below the 109.00 handle, now looks a distinct possibility.
On the economic data front, Japan’s unemployment rate held steady at 2.5% but did little to influence the price action. Later during the early NA session, the release of Conference Board's US consumer confidence index would now be looked upon for some short-term trading impetus.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes: “The USD/JPY pair will likely take out immediate support at 108.81 - 38.2 percent Fibonacci retracement of Mar-May rally and drop to 108.20 in a week's time.”
“Only a daily close above 110.00 would abort the bearish view,” he adds further.