USD/JPY bears in full control, tumbles to fresh 6-week lows near 109.65

The USD/JPY pair came under renewed selling pressure on Tuesday and tumbled below the key 110.00 psychological mark to its lowest level since April 25.

The US economic data, released on Monday, showed a drop in factory orders in April and ISM nonmanufacturing index for May, and failed to assist the pair to build on early recovery move. 

Adding to this, today's better-than-expected release of labor cash earnings data from Japan, rising at the fastest pace in four months, provided an additional boost to the Japanese Yen. This coupled with the prevalent risk-off environment, as depicted losses in Asian equity markets and reaffirmed by sliding US treasury bond yields, further extended support to the Japanese Yen's safe-haven appeal and collaborated to the pair's sharp downslide to six week lows, near 109.70-65 region.

A relatively thin US economic docket, featuring the release of JOLTS job openings data, is unlikely to provide any immediate respite for the bulls, with the pair extending its sharp downslide now seems a distinct possibility. 

Technical levels to watch

Weakness below 109.60 level now seems to drag the pair towards 109.30-25 support area before eventually dragging it below the 109.00 handle back towards multi-month lows support 108.40-30 region with some intermediate support near 108.80-70 area.

On the flip side, any recovery attempts back above the 110.00 handle now seems to confront strong resistance near 110.15-20 zone, above which a bout of short-covering could lift the pair back towards 110.75 horizontal resistance.