USD/JPY back below 106.00, close to 5-week low

Global risk-off sentiment, driven by intensifying Brexit concerns, is forcing investors to dump riskier assets like equities and rush towards the perceived safety of the Japanese currency with the USD/JPY pair now trading close to a 5-week low level of 105.75 touched on Monday.

With less than 10-days before the critical UK-EU referendum, flight to safety seems to be the broad market theme. Moreover, investors also seem to position themselves cautiously ahead of the key central bank monetary policy decisions, especially from the US Federal Reserve and Bank of Japan on Wednesday and Thursday respectively. 

In the meantime, a fresh wave of risk-aversion is likely to attract fresh tide of selling pressure for the USD/JPY pair that should continue driving the pair lower in the near-term.

Technical levels to watch

From current levels, 105.55 (May 3 low) is likely to extend immediate support, which is followed by support near 105.20 (Oct. 15, 2014 low). Break below these immediate support levels might now turn the pair vulnerable to extend its weakening trend towards its next major support near 103.00 round figure mark. 

On the flip side, momentum above 106.00 handle now seems to confront immediate resistance around 106.75-80 zone, above which the pair seems to extend the recovery momentum beyond 107.00 handle, towards its next major resistance near 107.55-60 area.