USD/JPY struggles near multi-week lows, below 113.00 mark
|- USD/JPY witnessed selling for the fourth successive day on Tuesday amid sustained USD selling.
- The cautious market mood underpinned the safe-haven JPY and also contributed to the decline.
- Acceptance below the 113.00 round figure might have already set the stage for additional losses.
The USD/JPY pair maintained its offered tone through the mid-European session and was seen trading around the 112.90-85 region, just a few pips above four-week lows touched earlier this Tuesday.
A combination of factors dragged the USD/JPY pair lower for the fourth successive day and reaffirmed the overnight bearish break below the 113.30-25 strong horizontal support. The cautious market mood underpinned the safe-haven Japanese yen and exerted some pressure on the major amid the prevalent US dollar selling bias.
In fact, the greenback prolonged its recent pullback from YTD tops touched in reaction to the upbeat NFP report on Friday and was pressured by the Fed's dovish outlook. It is worth recalling that the US central bank stuck to its transitory inflation narrative and indicated that it was in no rush to raise borrowing costs.
Apart from this, a fresh leg down in the US Treasury bond yields further weighed on the greenback and contributed to the USD/JPY pair's decline to the lowest level since October 11. The downfall could also be attributed to technical selling below the 113.00 mark, which might have already set the stage for further losses.
That said, slightly oversold RSI on hourly charts held back traders from placing fresh bearish bets and helped limit losses. Traders now look forward to the release of the US Producer Price Index (PPI). This, along with Fed Chair Jerome Powell's remarks will influence the USD and provide some impetus to the USD/JPY pair.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.