USD/JPY: Sellers back in control, approaches post-Trump lows

The USD/JPY pair faced rejection at 115.50 levels and from there resumed its overnight selling spiral amid renewed weakness in treasury yields and USD across the board.

Markets were highly disappointed by Trump’s lack of commentary on his campaign promises of boosting fiscal stimulus and steering US economic growth during his first address as the US president-elect yesterday.

Hence, the US treasury yields suffered the most alongside the greenback, with a fresh round of selling witnessed once again this session, knocking-off USD/JPY to a new daily low of 114.61, fast approaching five-week lows struck at 114.25 in the last US session.

Moreover, upbeat Japanese current account data also help the yen to recover lost ground, while a steep drop in the Nikkei 225 index triggers safe-haven flows into the domestic currency.

Focus now remains on the US jobless claims and speeches by Fed officials Evans and Harker due later in the NA session.

USD/JPY Technical levels to watch 

The major finds immediate resistance at 116.39 (5-DMA). A break above the last, the major could test 116.67/76 (10-DMA/ 1h 200-SMA) and 116.98 (20-DMA) beyond the last. While to the downside, the immediate support is seen at 114.50 (psychological levels) next at 114.25 (post-Trump low) and below that at 114.00 (round figure).