• Weighed down by fresh USD selling bias.
• Reviving safe-haven demand adds to the downward pressure.
The USD/JPY pair came under some renewed selling pressure on Friday and slipped below 50-day SMA support to over 4-week lows.
The pair did attempt a modest recovery on Thursday but failed to gain any follow through traction and was being capped by a slight disappointment from the US economic data.
• Forex Today: DXY sold-off into US politics
With investors looking past the passage of a long-awaited tax reform bill in House of Representatives, the latest US political jitters, wherein Trump’s campaign has been ordered to turn over information to Mueller’s investigation, exerted some fresh downward pressure on the US Dollar.
The Japanese Yen further benefitted from reviving safe-haven demand, further reinforced by a subdued action around the US Treasury bond yields.
• Japan PM Abe promises to "rid the country of deflation once and for all"
On the economic data front, the US housing market data - building permits and housing starts, would now be looked upon for some fresh impetus later during the NA session. In the meantime, broader market risk sentiment and the USD price dynamics would continue to determine the pair's movement through the European trading session.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet writes: "the spot looks set to test the 200-day MA level of 111.76 and any upticks are likely to run out of steam in the range defined by the downward sloping 5-day MA and 10-day MA."
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