The USD/JPY pair came under some renewed selling pressure on Tuesday and reversed majority of previous session's recovery move from nearly three week lows.
Currently trading around 112.40-35 band, testing session lows, a fresh wave of downslide in the US treasury bond yields, leading to the greenback weakness across the board, could be a key factor driving the pair's latest leg of downslide. In fact, the key US Dollar Index is now flirting with session lows near 101.00 handle and has been a key factor collaborating to the pair's downslide during early European session.
The pair struggled to extend overnight recovery move, led by renewed bets for a Fed rate-hike action in March after Dallas Fed President Robert Kaplan's hawkish comments, despite of Tuesday's disappointing release of Japanese Industrial Production data as investors refrained from carrying long-dollar positions ahead of the US President Donald Trump's first address to Congress later during the day.
Along with the eagerly awaited Trump speech, today's important US macro data - prelim GDP print, Chicago PMI and CB Consumer Confidence Index, would also be looked upon for some fresh impetus for the pair's near-term direction.
Technical levels to watch
A follow through retracement below could get extended towards 112.00 handle, below which the pair is likely to aim towards Feb. monthly lows support near 111.60 horizontal zone ahead of 111.10-111.00 support area. On the flip side, momentum above 112.75 level now seems to boost the pair beyond 113.00 handle towards its next resistance near 113.20-25 region.
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