USD/JPY: looking to recover albeit bearish bias to 1110.50 persists

Currently, USD/JPY is trading at 110.86, up +0.01% on the day, having posted a daily high at 110.92 and low at 110.75.

• Forex today: not as much inflation in US hurts DXY
• Wall Street closes lower, weighed down by mixed data and weak oil

USD/JPY is flat on the session so far is a slow start in Asia beside sterling that has been hit on the most recent polls. The risk overnight, however, was mildly lower and supporting the yen while the dollar was hit by sentiment for lower inflation in the US economy. "The headline PCE deflator fell from an upwardly revised 1.9% annual pace to 1.7%.

A June hike is still priced into the dollar and despite US 10yr Treasury yields falling from 2.24% to 2.21%, 2yr yields from 1.29% to 1.28%. In fact, Fed fund futures yields were slightly firmer, pricing a June rate hike as an 90% chance. This enabled USD/JPY to firm and support came in from 110.65. 

USD/JPY levels

USD/JPY: Looking for a move towards 110.00

Valeria Bednarik, chief analyst at FXStreet explained that with USD/JPY trading around 110.80, the pair is slowly gaining bearish traction, as intraday technical readings favor additional declines. In the 4 hours chart, the price moved further below its 100 and 200 SMAs that are still lacking directional strength, whilst the Momentum indicator turned south after faltering around their mid-lines, whilst the RSI indicator also turned south, now standing around 36. The pair has an immediate support at 110.50, the 61.8% retracement of its latest bullish run, the level to break to confirm a new leg south.