USD/JPY bears stepping up the pace in Tokyo, target 110.10?

Currently, USD/JPY is trading at 110.66, down -0.22% on the day, having posted a daily high at 110.96 and low at 110.56.

USD/JPY's downside just opened up in Tokyo, extending the supply from overnight markets. USD/JPY recently lost the 112 handle at the end of the first quarter this year while markets lose confidence in the 'Trump trade' and 111.20 support gave way in the US session undermined by plummeting US stocks and Treasury yields, as explained by Valeria Bednarik, chief analyst at FXStreet.

"The 10-year note benchmark fell down to 2.34%, its lowest in over a month, whilst the 2-year note fell to 1.22%, as mixed US manufacturing indexes dented latest confidence in the US and fueled demand for bonds."

USD/JPY levels

USDJPY: Markets look set to remain nervous and choppy

Valeria Bednarik suggested that the pair is poised to retest its recent lows around 110.10, with a major Fibonacci support being at 109.90, the 50% retracement of the late 2016 monthly advance. "The level should attract buyers if reached, but a break below it could see the pair entering in sell-off mode, and aim towards 108.50, mid-November lows."

"Below 110.11, the recent low will retarget the 108.44 200 day ma," complimented analysts at Commerzbank with such a view on the downside, adding, "rallies will find initial resistance at 113.11 (20 day ma) but only above 115.62, would we look for a challenge to the key short-term resistance offered by the 16 month resistance line at 117.44."