“¢ Surging US bond yields does little to stop the USD from collapsing.
“¢ Traders shrugged off today’s slightly better US economic data.
“¢ Technical selling below 112.00 handle could accelerate the fall.
The USD/JPY pair held on to its weaker tone through the early North-American session and refreshed session lows post-US economic data.
Despite a fresh leg of an upsurge in the US Treasury bond yields, the US Dollar collapsed to over three-month lows and was seen as one of the key factors exerting some downward pressure on the major.
The USD bulls failed to gain any respite from today’s better-than-expected Philly Fed manufacturing index, coming in at 22.9 for Sept. vs. 17.0 expected, and initial weekly jobless claims, falling to 201K as against a rise to 210K anticipated.
The pair has now slipped below a three-week-old ascending trend-line support, extending from lows touched on Sept. 7-12-18, and hence, a follow-through weakness, led by some fresh technical selling now looks a distinct possibility.
Technical levels to watch
A follow-through weakness below the 112.00 handle will confirm a bearish breakdown and accelerate the slide towards 111.65 horizontal support. On the flip side, the 112.25-30 region now becomes immediate resistance, above which the pair is likely to make a fresh attempt towards reclaiming the 113.00 handle.
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