USD/JPY hits 3-week lows as yields drop further

USD/JPY failed earlier to hold above 112.00 and recently turned sharply to the downside after the ECB meeting and particularity following a Bloomberg report regarding an investigation on Trump’s businesses. 

Mueller expands probe to Trump business transactions - Bloomberg

The pair fell from 112.10 to 111.47, reaching the lowest level since June 26. The bearish pressure intensified amid a decline in US yields. The 10-year dropped to 2.243%, also the lowest in three weeks. In Wall Street, the Dow Jones that opened higher was falling 0.20%. 

The reversal in the trend in Wall Street and in the bond market took place after news about expanding Russia probe to Trump’s business transactions. The Dollar Index fell from a three day low near 95.00, to 93.85, a fresh 1-year low. Recent price action ended abruptly a recovery that was in place in the DXY and also in the USD/JPY pair. 

USD/JPY Levels to watch 

To the downside, support levels might be located at 111.40 (Jun 16 high), 110.90 (Jun 22 low) and 110.60 (Jun 16 low). On the upside, resistance is now seen at 111.85, 112.00/05 (20-hour moving average) and 112.40 (daily high).