The USD/JPY pair extended its corrective move for the third consecutive session and dropped to a fresh session low during early US trading session.
Currently trading at six-day low level, around 103.20 region, the pair is fast approaching an important support at 100-day SMA near 103.10 region. The greenback's corrective move, as measured by the overall US Dollar Index, from multi-month highs gained momentum following disappointing release of housing starts data for the month of September, which negated an upsurge in building permits.
Moreover, the prevalent cautious sentiment around equity markets in the US and Europe is further supporting safe-haven appeal of the Japanese Yen and exerting additional selling pressure around the major.
Investors on Wednesday will remain focused on the third and final presidential debate, which might provide fresh impetus ahead of speech from Federal Reserve Bank of New York President William Dudley.
Valeria Bednarik, Chief Analyst at FXStreet, notes, "the pair has turned technically bearish, given that in the 1 hour chart, it has broken below an ascendant trend line coming from Oct. 10, while trading below its 100 and 200 SMAs. In the same chart, technical indicators head south within negative territory, supporting a downward extension. In the 4 hours chart, technical indicators have lost downward strength but remain well below their mid-lines, whilst the 100 SMA heads higher below the current level, limiting chances of a steeper decline. The key support comes at 102.60, the 100 DMA, as a break below it will confirm a continued slide for the upcoming sessions."
"Support levels: 103.00 102.60 102.20
Resistance levels: 103.65 104.10 104.60"