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  • USD/JPY fell to 109.86 – the lowest level since June 27 – in Asia.  
  • The dollar is being offered on fears that President Trump may force the Fed to slow down the pace of policy tightening.  

The USD/JPY hit an eight-week low of 109.86 in Asia and fell below the 100-day moving average for the first time since May 29.  At press time, the currency pair is trading at 109.90.  

Asian desks are likely pricing-in the possibility of the Fed slowing down the pace of policy tightening in the near future in response to criticism from the White House.  

The news hit the wires yesterday that President Trump complained about the Federal Reserve’s rate hikes at a Hamptons fundraiser this weekend.  As a result, the 10-year treasury yield fell more than five basis points to 2.82 percent yesterday, sending the USD lower across the board. As of writing, the 10-year yield is showing signs of weakness at 2.82 percent.  

Looking ahead, the pair could suffer a deeper drop if the treasury yields extend the overnight decline. Technically speaking, the spot is looking weak, having pierced the key support of 110.11. A close below 110.00 would only bolster the already bearish setup: lower highs and lower lows, break below 50-day MA seen earlier this week and downward sloping 5-day and 10-day moving averages.  

USD/JPY Technical Levels

Resistance: 110.00 (100-day MA), 110.40 (5-day MA), 110.67 (10-day MA)

Support: 109.55 (June 19 low), 109.37 (June 25 low), 109.00 (psychological support)