USD/JPY headed back to Tuesday's two-month lows
After yesterday's brief pause, the USD/JPY pair resumed with its near-term weakening trend and reversed previous session's tepid recovery gains.
Persistent greenback selling pressure, with the key US Dollar Index reversing Wednesday's rather weak recovery gains and hitting the lowest level since mid-November, against a backdrop of less hawkish Fed has been the key factor driving the pair lower on Thursday.
This coupled with the prevalent risk-off mood is further boosting the Japanese Yen's safe-haven demand and collaborating to the pair's offered tone, dragging it closer to Tuesday's two-month lows. The pair was last seen trading around 112.60-55 region.
Later during the day, BoE infused volatility in the FX market would derive the safe-haven demand and provide some impetus during European session and from the US, traders will confront the release of weekly jobless claims.
Technical levels to watch
On a sustained weakness below 112.50 area, the pair seems to break through 112.17 level (Tuesday's low) and accelerate the slide towards 112.00 round figure mark. A follow through selling pressure is likely to continue dragging the pair further towards 111.60 support area (Nov. 29 low) ahead of 111.35 (Nov. 28 low).
Meanwhile on the upside, recovery attempts back above 113.00 handle might now confront resistance near 113.25 level above which a bout of short-covering could lift the pair towards 113.75-80 horizontal resistance, en-route 114.00 handle.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
