USD/JPY flirting with session lows, around 114.00 handle

   “¢   A modest USD retracement prompts some profit-taking after recent upsurge.
   “¢   Bullish traders ignored surging US bond yields/upbeat US jobless claims data.
  “¢  Recovery in investors’ risk-appetite does little to lend any support.

The USD/JPY pair extended its corrective slide from 11-month tops and dropped to fresh session lows, around the 114.00 handle in the last hour.

The US Dollar held on the defensive through the early North-America session and seemed rather unaffected by a combination of supporting factors, especially the ongoing strong rally in the US Treasury bond yields.  

Bullish traders largely ignored today’s better-than-expected US economic data, showing that initial weekly jobless claims decreased by 8,000 to 207K during the week ended September 29.  

Even a goodish rebound in the European equity markets and the US indices futures, which tends to dent the Japanese Yen’s safe-haven demand, also did little to lend any support or provide any fresh bullish impetus.

The price action clearly indicated that investors now seemed inclined to take some profits off the table ahead of Friday’s key event risk – the closely watched US monthly jobs data (NFP).  

Meanwhile, today’s downtick might still be categorised as corrective in nature following the pair’s recent upsurge of over 400-pips since early-Sept.

Hence, it would be prudent to wait for a strong follow-through long-unwinding pressure before jumping to a conclusion that the pair might have topped out in the near-term.

Technical levels to watch

A sustained weakness below the 114.00 handle is likely to get extended towards the 113.55-50 horizontal zone before the pair eventually drops to test the 113.10-113.00 support area.

On the flip side, the 114.25-30 region now becomes immediate resistance and is followed by multi-month tops, around the 114.55 area, above which the pair seems all set to aim towards the key 115.00 psychological mark.