USD/JPY tumbles to fresh session lows, below mid-110.00s
| • A modest USD rebound losses steam.
• Retracing US bond yields fail to assist.
• Bearish pressure likely to persist.
The USD/JPY pair extended the post-BOJ retracement slide and slipped below mid-110.00s in the last minute.
With investors looking past today's dovish remarks by the BOJ Governor Haruhiko Kuroda, during the post-meeting press conference, a sharp retracement in the US Treasury bond yields once again failed to assist the pair to build on an early move back above the 111.00 handle.
The market also seems to have digested the news of a deal to temporarily end the US government shutdown, with a modest US Dollar pull-back from highs exerting some additional downward pressure on the major.
Meanwhile, traders seemed to have largely ignored the prevalent positive trading sentiment around European equity markets, which tends to weigh on the Japanese Yen's safe-haven appeal, with the US bond yield dynamics acting as a key determinant of the pair's sharp retracement since late Asian/early European session.
From a technical perspective, a decisive break below mid-110.00s points to a fresh bearish break and hence, a follow-through weakness, amid lack of fresh fundamental catalyst, now looks a distinct possibility.
Technical levels to watch
Bears would now be eyeing to test monthly lows support near 110.20 area, below which the pair is likely to break below the key 110.00 psychological mark and head towards testing mid-September lows support near 109.55 level.
On the upside, 110.80 area now becomes an immediate resistance, which is closely followed by resistance at the 111.00 handle and the 111.20-30 region. Momentum beyond the mentioned hurdles could get extended back towards the very important 200-day SMA hurdle near the 111.75 region.
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