USD/JPY breaches 113 support on fresh USD supply

• DXY reverts to 3-1/2-week lows.
• Downside opening up towards 112.80?
• Eyes on the US data.

The USD/JPY pair extends its bearish momentum into a fifth day today, mainly driven by a broadly weaker US dollar and better Japanese fundamentals.

USD/JPY: Range-break awaited

The spot came under renewed selling pressure in late Asia/ early Europe, as the US dollar resumed its recent sell-off versus its main rivals, with the USD index now printing fresh 3-1/2 week lows at 92.52 levels.  

The greenback remains broadly under pressure for the eighth straight sessions, in the wake of a retreat in 10-year Treasury yields while doubts whether the Fed would deliver on its rate hike expectations next year also weighs down on the buck.

Moreover, better-than-expected Japanese industrial production and retail sales data boosts the sentiment around the Yen, collaborating to the downside in the major. Japan industrial output, retail sales rise more-than-expected in Nov

Markets looked past the BoJ’s Summary of Opinions report, as all eyes now remain on the USD dynamics and risk trends ahead of the US macro news for fresh momentum.

USD/JPY Technical View

FXStreet’s Chief Analyst, Valeria Bednarik, explained, “The pair maintains a neutral stance in the short-term, as in the 4 hours chart, technical indicators remain flat in neutral territory, while the pair continues developing above its 100 and 200 SMAs, which continue losing upward strength. As mentioned in previous updates, the immediate support is the 112.90 level, with declines limited as long as the pair remains above it. Support levels: 112.90 112.60 112.00. Resistance levels: 113.40 113.70 114.00.”