USD/JPY slips below 113.00 handle, fresh 1-week lows

   •  A sharp fall in the US bond yields prompts some aggressive selling on Tuesday.
   •  A follow-through USD selling pressure adds to the ongoing bearish momentum. 
   •  The global flight to safety further underpins JPY and does little to lend support.

The USD/JPY pair remained heavily offered through the early European trading session and is now on the verge of breaking below the 113.00 handle.

After yesterday's good two way move, a combination of negative factors prompted some aggressive selling and dragged the pair to over one-week lows. 

With investors fretting over a possible pause in the Fed's rate-hike cycle, a sharp fall in the US Treasury bond yields and turned out to be a key trigger for bearish traders. 

In fact, the benchmark 10-year yield dropped to its lowest level since mid-September and exerted some additional downward pressure on the already weaker US Dollar, triggered by the US-China trade truce.

Adding to this, a fresh wave of global risk-aversion trade, as depicted by weaker tone across equity markets, underpinned the Japanese Yen's safe-haven status and further collaborated to the pair's steep intraday decline. 

In absence of any major market moving economic releases, broader market risk sentiment and the USD/US bond yield dynamics might continue to play an important role in influencing the pair's momentum on Tuesday.

Technical outlook

Omkar Godbole, FXStreet's own Analyst and Editor explained, “the pair is trapped in a narrowing price range or a symmetrical triangle pattern. Yesterday Doji candle indicates the rally from the Nov. 20 low of 112.30 has likely run out of steam at a high of 113.84 hit on Nov. 27.”

“A bearish reversal, however, would be confirmed if the pair closes today below 113.37 (low of yesterday's doji candle). That would open up downside toward the triangle support, currently seen at 112.57,” he added further.