USD/JPY Review: Drops to fresh session low, risks confirming a near-term bearish breakdown

   •  The pair continues losing ground amid broad based USD weakness.
   •  The downfall seemed unaffected by risk-on mood/rising US bond yields.
   •  Break below 50-DMA to open room for an additional near-term downfall.

The USD/JPY pair kept losing altitude through the early North-American session and has now moved on the verge of breaking below the 111.00 handle.

After yesterday's modest rebound/brief pause, the pair met with some fresh supply and extended last week's retracement slide from levels beyond the 112.00 handle. A modest US Dollar retracement was seen as one of the key factors behind the pair's weaker tone for the fourth session in the previous five. 

The latest leg of sharp downtick over the past couple of hours could also be attributed to the White House national security adviser John Bolton's comments, saying that North Korea has not taken the steps necessary on denuclearization, which seems to have prompted some safe-haven buying. 

Meanwhile, the ongoing downfall seemed largely unaffected by a goodish pickup in the US Treasury bond yields and the prevalent risk-on mood, with the USD price dynamics turning out to be a key driver of the pair's negative momentum amid absent market moving economic releases.

Technical Analysis

The pair is challenging a short-term ascending trend-line support, extending from late May through lows touched in June and July. A follow-through weakness, leading to a subsequent fall below 50-day SMA, would mark a near-term bearish breakdown and turn the pair vulnerable to head back towards challenging the key 110.00 psychological mark. 

Alternatively, a goodish rebound from current support area could help the pair to move back towards the 111.40-50 supply zone, above which the momentum could get extended back towards reclaiming the 112.00 handle.